Excel Presentation Chapter 3

Fig 3-10 Business Process & Information System for Bike Rental

© Pearson Prentice Hall 2009 3-2

Each business must first analyze its industry and choose a competitive strategy. Will it be a low-cost provider or differentiate its products from competitors?

Then it must design its business processes to span value-generating activities.

Once those decisions have been made, a business can structure an information system that supports its business processes.

© Pearson Prentice Hall 2009 3-3

Resort Bicycle Rental

Bicycle Inventory Valuation

Monday, October 29, 2007

Make of Bike Bike Cost Numberon Hand

Cost of CurrentInventory

Number ofRentals

Total RentalRevenue

Revenue per Bike

Revenue as percentof Cost of Inventory

Wonder Bike $325 12 $3,900 85 $6,375 $531 163.5%

Wonder Bike II $385 4 $1,540 34 $4,570 $1,143 296.8%Wonder Bike Supreme $475 8 $3,800 44 $5,200 $650 136.8%

LiteLift Pro $655 8 $5,240 25 $2,480 $310 47.3%

LiteLift Ladies $655 4 $2,620 40 $6,710 $1,678 256.1%

LiteLift Racer $795 3 $2,385 37 $5,900 $1,967 247.4%

Resort Bicycle Rental

Bicycle Inventory Valuation

Monday, October 29, 2007

Make of Bike Bike Cost

Numberon

Hand

Cost of Current

Inventory

Rent Price

Number of

Rentals

Total Rental

Revenue

Revenue per Bike

Revenue as percent

of Cost of Inventory

On Hand to Rentals

Ratio

Gross Profit

Wonder Bike $325 12 $3,900 $75.00 85 $6,375 $531 163.5% 14.1% $2,475

Wonder Bike II $385 4 $1,540 $134.41 34 $4,570 $1,143 296.8% 11.8% $3,030Wonder Bike Supreme $475 8 $3,800 $118.18 44 $5,200 $650 136.8% 18.2% $1,400

LiteLift Pro $655 8 $5,240 $99.20 25 $2,480 $310 47.3% 32.0% -$2,760

LiteLift Ladies $655 4 $2,620 $167.75 40 $6,710 $1,678 256.1% 10.0% $4,090

LiteLift Racer $795 3 $2,385 $159.46 37 $5,900 $1,967 247.4% 8.1% $3,515

Average per Bike $548 6.5 $3,248 $125.67 44.2 $5,206 $1,046 191.3% 15.7% $1,958

Total $3,290 39 $19,485 $754.00 265 $31,235 $6,278 160.3% 14.7% $11,750

1. Sell all LiteLift Pro’s because the product does not rent well even with a lower price and has lost Resort Bicycle Rental money.

2. If stock outs have lost them money they should buy more LiteLift Racer’s and maybe LiteLift Ladies and Wonder Bike II also.

3. To set productivity Benchmarks for every product to meet like:

Revenue as percent of Cost of Inventory to be over 200%.

Resort Bicycle Rental

Bicycle Inventory Valuation

Monday, October 29, 2007

Make of Bike Bike Cost

Numberon

Hand

Cost of Current

Inventory

Rent Price

Number of

Rentals

Total Rental

Revenue

Revenue per Bike

Revenue as percent

of Cost of Inventory

On Hand to Rentals

Ratio

Gross Profit

Wonder Bike $325 12 $3,900 $75.00 85 $6,375 $531 163.5% 14.1% $2,475

Wonder Bike II $385 4 $1,540 $134.41 34 $4,570 $1,143 296.8% 11.8% $3,030

Wonder Bike Supreme $475 8 $3,800 $118.18 44 $5,200 $650 136.8% 18.2% $1,400

LiteLift Ladies $655 4 $2,620 $167.75 40 $6,710 $1,678 256.1% 10.0% $4,090

LiteLift Racer $795 3 $2,385 $159.46 37 $5,900 $1,967 247.4% 8.1% $3,515

Average Per Bike $527 6.2 $2,849 $130.96 48.0 $5,751 $1,194 220.1% 12.4% $2,902

Total $2,635 31 $14,245 $654.80 240 $28,755 $5,968 201.9% 12.9% $14,510