4/13/2010

ISYS2056

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Fameez Haroon S3287454 Cindy La S3285830 Business Computing 1 High Distinction Illiya Ananiev : Work Shop Time : Wednesday 3.30 4.30

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Contents
SLICK JIM S USED CARS BUSINESS REPORT .................................................... 3 INTRODUCTION .............................................................................................. 3

Profitability for Different Car Categories ....................................................... 3

Future Car Sales ............................................................................................. 4

Popularity of Various Car Models .................................................................. 4

Staff Sales ....................................................................................................... 5

Conclusion ...................................................................................................... 5

Recommendations ......................................................................................... 5

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SLICK JIM S USED CARS BUSINESS REPORT INTRODUCTION

The accountant has prompted Jim to update his Data entry skills to an electronic based spread sheet to help ensure that Jim makes more accurate and decisive decisions to help maximize profit. Previously many records were kept in paper form and calculations made by hand. This is unproductive as records could be lost and human error can make mistakes with calculations by hand. A spreadsheet has been designed to help Jim make more accurate decisions by allowing him to see which cars are most profitable , calculate staff commission , calculate profit and many more features on a neat user friendly interface that will be easy for Jim to use . This should allow Jim to make strategic and management decisions

Profitability for Different Car Categories

The most profitable car in Jims used Car yard was the Prestige earning a profit margin of 47 % which converts to a profit of $81,297. That was followed by the 4 wheel drive which had a profit of 22% which converts to $38,535. Jims least profitable car actually made a negative profit of 9% which converts to a loss of $14,943, this car was the Sedan.

The prestige had the highest commission rate of 5% and therefore made the highest amount of sales. The second largest commission rate was the 4 wheel drive which has a commission rate of 4%. This shows the trend of the higher commission rate of the car means the higher sales of each car. This gives the sales people an incentive to sell the car. So a solution to increasing sales is to increase the commission rates on the cars that have the least amount of sales. The prestige and 4 wheel drive also had the most advertising costs. This shows the trend that the more advertising Jim does on each car the more sales that he will make . The sedan had an adverting cost of $4780 however incurred a loss on that car. A solution to this is to stop stocking the Sedan or have more effective advertising on the Sedan.

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Total Profit by Category of Car by January

0% 1% 10% 5% -9% 4% people mover commercial sedan utility 4 wheel drive 22% 47% soft roader prestige hatch 2% wagon

Future Car Sales

Jim should think about deleting the Sedan and People mover from his car yard, as they take up space that could be used to stock up other cars. The sedan is incurring a loss of $911 (after advertising) and the People Mover is incurring a loss of $19,723 (after advertising). The prestige and 4 wheel drive are his best quick sellers. So Jim could take the advice of his accountant and specialize in the top selling cars rather than a wide array of cars. This would be easier for Jim to keep records off and allow the sales people to specialize in a smaller amount of cars

Popularity of Various Car Models

The best selling cars according to the Australian Government initiative as of End of April 2009 was (http://www.mlit.go.jp/kokusai/MEET/documents/MEETFUM/S4-Australia-sup1.pdf)

1 Holden Commodore (Sedan) 2 Mazda 3 (Sedan) 3 Toyota Corollas (Sedan) 4 Ford Falcon

The best selling cars in Australia are Jims worst selling cars in his Used Car yard. This shows that he should get out of the market for Sedans. Jim should try and specialize in a certain category of car such as the prestige which earned him a great profit.

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Jim Does not stock Ford Falcons which are the 4th best selling cars in Australia. Jim should consider testing out the market for used Ford Falcons and see if there is profit to be made in it. Jim has to stop the habit of picking cars based on price. He needs to start picking cars that are the most popular

Staff Sales
In terms of profit Franco made the most amount of profit which was $57875. However Jim made the most amount of sales which was $731284 compared to that of Franco who made $479190. Jim also earned the highest amount of Profit. Stephanie was the least profitable sales person. The trend in Sales was that the higher amount of commission paid on each car, the greater the sales on that car would be. For example The prestige had the highest amount of Sales and also had the highest amount of commission (5%). This shows that if you increase the commission on the cars that are not selling , Jim may see an increase in profit as there will be an incentive to make greater sales.

Conclusion
By allowing a electronic spread sheet this helps Jim see which cars are selling and which cars are non profitable. The spread sheet allows Jim to reduce human error and not lose documents. Jim should consider specializing in only a few car types rather than all of them , Simply because not all the cars that he stocks are profitable. Jim should consider not stocking Sedans and testing out the market for Ford Falcons as they are the 4th bestselling car in Australia .

Recommendations
y Jim should stop stocking Sedans and specialize in a certain car types such as The prestige. y y y Jim should stop stocking wagons because he is not selling any Jim should test the market for Ford Falcons as they are a great selling car in Australia. Jim should consider raising the commission on the cars that have a small amount of commission as the trend shows the higher amount of commission increases the sales. y Jim should consider hiring another sales person to help increase the amount of sales made.
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