Case Study: Greenlawn commercial package business
Darden business publishing
Budgets: Average regional commercial package business
Analysis and comparison
Activity drivers for average region:
Commercial package clients
New # of applications decreasing Capacity/truck (applications/season)
15000/37 Trucks required/region
15000/408 (12 apps*34 wk season=408 apps per truck)
$400 per applic*15000 apps Direct Costs:
Lease expenses on trucks
37 trucks*13K avg annual lease cost Sevice technicians
22% decrease in 2,415,600 orig cost Fertilizers, pesticides, etc.
56% decrease in 3,111,000 orig cost Fuel, insurance and other operating costs
32% increase in 683,200 original cost Total Direct Costs
Contribution on direct costs
Marketing, sales and promotional expenses
1.1M/10m revs=11% overhead. 11%*6m revs Regional administrative costs
same, no change Contribution
Contribution margin %
1- Amy is at the cross roads of two options.
See revised calculation above with the cost reductions/increases with the new plan for transforming Greenlawn, Inc.’s commercial package division. Amy’s new era project is considered a major advancement for the division. Introducing a new generation of products that bring significant benefits to the organization as well as its customers in the Maryland tri-state area business will continue Greenlawn’s pioneering spirit as well as reputation in the industry. Amy can keep the family business running as it...
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