QRB/501 Week 1: Quantitative Reasoning For Business
1430 Words6 Pages
Karen E. Estremera Pizarro, Gisela Sierra,
Stephanie León and David Varela
University of Phoenix
Quantitative Reasoning for Business - QRB/501
June 29, 2013
Prof. Angel Meléndez
Inventory Proposal La Boutique C, located in San Juan, since 2000 was founded by a group of young entrepreneurs who came from New York. The boutique established a clothing boutique selling fine jeans for ladies. They built their business with great effort and caution. Successfully grew and La Boutique C, achievement compete with larger stores instead. They gained a great prestige and confidence of customers.
One of his partners presented with the opportunity to acquire a large amount of jeans at a good price with great expectations…show more content… A 20% discount of original price for a period of one week. In the second special sale will offer a 30% discount from its original price per unit. According as remaining inventory the company will be clearance with a 50% and offer free one jean with the purchase. The goal of the proposal is to bring the inventory to the minimum amount available to avoid storage costs and prepare for the upcoming shopping season.
The experience with excess inventory event has prompted owners of La Boutique C, to be more careful in buying merchandise after the output has no time. This will avoid staying in the stores taking up space, increasing storage costs, patent costs, and affecting the cash flow of the business for the purchase of different goods.
Four years historical inventory data for La Boutique "C" The La Boutique “C” inventory data is the source for develop management proposal. Annual trend lines were plotted in a graphic to display the inventory amounts for each year and the trend line. In this case is positive, which indicates that the probability of inventory levels in the subsequent years will continue to rise without considering any additional factors that may influence the business. The Table 1 shows the inventory data for the last four years and the Figure 1, shows the trend line.
Table 1.…show more content… The result of these equations is $91,791.64 that represents the present value. For the future value, the interest was calculated to the inventory is an interest for the next three years of 5%. According with the factor table was multiply the present value by the factor. The equation is $91,791.64 multiply by (.85384) with the result of future value of $78,375.40 in the year of 2015. The inventory decrease represents a future value of $13,416.27. To evaluate this result is subtracting the present value to the future value. In the Figure 4, can see the calculus for the results.
Calculating Present Value and Future Value
In the type of industry you belong to La Boutique "C", a result of decrease in inventory as projecting the forecast does not necessarily mean lost. This decrease should be tied to a plan and sales strategies and goals established in the organization. Additional, a effects on the decline of inventory also can be interpreted as a good handling purchases of goods, movement control, and control storage costs among