Shuzworld Memo JGT2 Task 2 December 1, 2013 Below are the appropriate decision analysis tools that should be used to analyze the problems of Shuzworld. As the operations consultant, I recommend the following: A. DISTRIBUTION PATTERN The most cost efficient way to operate transportation distribution from Shuzworld H to ship 2,300 units would be to send 1,300 units from Shanghai to Warehouse 3, then receive 200 units from Shuzworld H 200 at Warehouse 1. The next step would be to move 1,500 units from Warehouse 2 and 500 units at Warehouse 3. The following step would be to transport 2,200 units from Shuzworld to Warehouse 1 equaling the cost of the distribution patter of $16,200.
Therefore, Ratio Analysis should only be used as a first step in financial analysis, to obtain a quick indication of a firm's performance and to identify areas which need to be investigated further Profitability. The net profit percentage shows the amount of money the business earns before the tax and the bills have been paid. This is useful because the company knows the amount of money they have before paying taxes and bills. To calculate this responsible has to calculate the net profit dived by the turnover and then times it by 100. FORMULA: (net profit/ turnover) x 100.
If costs of the barrels were added to inventory, it would increase inventory by $5,418,000 (172,000 x $31.50). Inventory would be valued at $9,924,000. That would be the only change on the balance sheet as cash would remain unchanged due to the switch. 2) On 6/30/61, there were 192,000 barrels on hand. Using the same math as in part 1 we get an increase of $6,048,000 for a final inventory value of $11,078,000.
B. adjustment of an unearned revenue MM-DD-YY | Cash | | | $ 1,500 | | | Unearned Revenue | | $ 1,500 | | Advance collection from client | | | 12-31-YY | Unearned Revenue | | $ 750 | | | Revenue | | | $ 750 | | Adjusting entry for earned portion of prepayment | b. c. Increase total revenue by $750 2) Sally Corporation provided $1,500 of services to Artech Corporation; no billing had been made by December 31. a. D. adjustment to record an accrued revenue 12-31-YY | Accounts Receivable | | $ 1,500 | | | Revenue | | | $ 1,500 | | Adjusting entry to reflect services provided | | b. C. Increase total revenue by $1,500 3) Salaries owed to employees at year-end amounted to $1,000. a. C. adjustment to record an accrued expense 12-31-YY | Salaries Expense | | $ 1,000 | | | Salaries Payable | | | $ 1,000 | | Accrued salaries at end of period | | b. c. Increase total expense by $1,000 4) The Supplies account revealed a balance of $8,800, yet only $3,300 of supplies were actually on hand at the end of the period. a. A. adjustment of a
While the Shanghai Expansion Projection will be a short-term, small-scale change for the organization it will most likely become the foundation for the larger expansion planned for the following year. The decision to use Kotter’s Eight-Step change process is because it is an established model and provides room for adjustments as seen necessary by executives of XYZ, Inc. throughout the change process. Kotter’s Eight-Step Process gives the organization time to introduce the change, an adjustment period and time to address resistance issues accordingly. Once the change has been implemented the intended goal is a 75% buy-in supporting the change organizationally. While the Shanghai expansion is the smaller of the two expansions, it is an important change and will provide executive leaders information related to the effects of change within their company and the knowledge to help make the larger expansion project successful.
The test market showed that only 6 percent of the market tried product and of those 6 percent 30 percent bought 3 times their initial purchase. Let us assume that the factors of the test market are mirrored once they distribute to the 19 cities in the southern tier of the U.S. Table 1 below shows the potential profits given the same variables as the test market with a few changes. The biggest change is the fixed costs adjusted for a bigger market. Since the new market is roughly 4 times the size of the test market, I multiplied the expenses to match the new market accordingly. The test market numbers given in Table 1 shows a loss of $1,204,150, which is mostly attributable to the high market expenses.
Management believes rapid inventory turnover, when combined with the operating efficiencies achieved by volume purchasing, efficient distribution, and reduced handling, enabled Costco to operate profitability at significantly lower gross margins than its competitors. A) Discuss how each component impacts profit generation. Selling high amount of merchandise at a very low cost leads to rapid inventory turnover. At some cases, Costco sold products before it had to pay many of its merchandise vendors. Even when vendor payments were made in time to take advantage of early payment discounts.
The combined sales from these markets amount to a staggering 48.7 Billion. From the end customer view, the company must focus on small users with tanks less than 1,000 gallons. Positioning: Katham MWX needs to be positioned as the cost-effective solution to maintain machinery and extend the life of metal working fluid. Price: The large price differentials from the manufacturer all the way down to the small user suggests that pricing needs to be re-structured through all channels. Currently, Rohm & Haas enjoys a 75% margin, Formulators also get 75%, and dealers claim they can sell this product for $6/packet, which translates to a 400% margin.
Plans for 2002 called continued tight management of working capital and €510- 560 million of capital expenditures, mostly on opening of 230-275 new stores. The operating economics involved gross margins of 52%, operating expenses of 22%. Net margins on Sales revenue were about one-half the size of the operating margins, with depreciation and of €158 million and taxes of €150 million helping reduce operating profits of €704 to net income of €340 million. Inditex was not the most profitable apparel retailer in the world; their stability was perhaps a more distinctive feature. HOW SPECIFICALLY DO THE DISTINCTIVE FEATURES OF ZARA’S BUSINESS
Under first in, first out (FIFO), the first costs into inventory are the first costs assigned to costs of goods sold. Last in, last out (LIFO) costing assigns the last costs of inventory to the first costs of goods sold. A fast moving consumer goods company (FMCG) in times of rising prices would pay less income tax if it used the LIFO inventory accounting method. A FMCG in times of rising prices that uses LIFO would be selling its inventory with the highest prices. This would increase the costs of goods sold and lower the net income for the company for that accounting period.