Cost benefit analysis CanGo
DeVry University
Accounting 460
Professor: Ivy Bennett
Group: B
Veronica Guajardo
Annie Lee
Isolina Pagan
Cost Benefit Analysis
VIA Consulting has been hired in CanGo’s behalf to assist its management group in the decision making of the implementation of the new operating ASRS system, and we came out with the following financial information and data.
CanGo started operating as a small company in 2006. In 2008 the company reported a net profit of $7,000,000 and $15,000,000 for the 2009. The company’s most profitable division has been its online book sale. Due to the fact that CanGo has been increasing its sales and revenue for more than 100%, the company has demonstrate that it is a profitable organization, but at the same time, it has been reporting an increase on client’s complains for a deficient customer service. According to management at the organization, some of the issues are unproductive personnel, the time for an order to be processed is too long, small warehouse space, and short inventory. CanGo is looking for a new operating system that allows them to decrease labor, lower space and increase productivity and revenue.
An ASRS (Automated storage and retrieval system) consists of a variety of computer-controlled systems for automatically placing and retrieving loads from defined storage locations. This type of system is utilized majorly for companies with a very high volume of loads being moved into and out of storage. The benefits of an ASRS system include reduced labor for transporting items into and out of inventory, reduced inventory levels, more accurate tracking of inventory, and space savings (Wikipedia, 2014). VIA Consulting is going to help CanGo to calculate the costs of the new ASRS system. Utilizing tools like net present value (NPV) and internal rate of return (IRR), we will examine and evaluate if the investment will benefit economically the organization.
The cost for a new ASRS system is approximately of $2,000,000
Accounting 460
Professor: Ivy Bennett
Group: B
Veronica Guajardo
Annie Lee
Isolina Pagan
Cost Benefit Analysis
VIA Consulting has been hired in CanGo’s behalf to assist its management group in the decision making of the implementation of the new operating ASRS system, and we came out with the following financial information and data.
CanGo started operating as a small company in 2006. In 2008 the company reported a net profit of $7,000,000 and $15,000,000 for the 2009. The company’s most profitable division has been its online book sale. Due to the fact that CanGo has been increasing its sales and revenue for more than 100%, the company has demonstrate that it is a profitable organization, but at the same time, it has been reporting an increase on client’s complains for a deficient customer service. According to management at the organization, some of the issues are unproductive personnel, the time for an order to be processed is too long, small warehouse space, and short inventory. CanGo is looking for a new operating system that allows them to decrease labor, lower space and increase productivity and revenue.
An ASRS (Automated storage and retrieval system) consists of a variety of computer-controlled systems for automatically placing and retrieving loads from defined storage locations. This type of system is utilized majorly for companies with a very high volume of loads being moved into and out of storage. The benefits of an ASRS system include reduced labor for transporting items into and out of inventory, reduced inventory levels, more accurate tracking of inventory, and space savings (Wikipedia, 2014). VIA Consulting is going to help CanGo to calculate the costs of the new ASRS system. Utilizing tools like net present value (NPV) and internal rate of return (IRR), we will examine and evaluate if the investment will benefit economically the organization.
The cost for a new ASRS system is approximately of $2,000,000
References: Retrieved on September 2014, from: https://www0.gsb.columbia.edu/premba/finance/s5/s5_5.cfm Retrieved on September 2014, from: http://en.wikipedia.org/wiki/Automated_storage_and_retrieval_system