In group of 5, you are required to tackle the following case study:
Ocean Limited is a UK company specialised in commercial corporate dressing (trendy uniforms) for employees in sales, presentation, reception, fairs etc. They have 50 employees and are operating 100% in the domestic market. The company designs the clothes but have the finished items imported from its affiliate in a low-waged country. At this moment the company takes the body-measurements of clients by hand measuring, 5 persons per hour with 2 employees.
The General Director of Ocean Ltd. has been in contact with a company that develops hi-tech body-scan machines and was offered a new invention based on ultra-sonic sensor technology. The new body-scan machine has the following features:
• Mobility.
• 60 persons per hour throughput.
• Persons to be scanned can still wear trousers and shirts.
• Handling of the body-scan by one operator.
• The time of implementation is estimated at 6 months.
• Total costs involved will be approximately £ 150,000.
Other relevant information:
• Man-hour cost: operator £ 60 per hour, other employees £ 40 per hour each.
• Average total cost of one outfit will be £ 400 with a gross profit margin of 40% of sales value.
• Sales are 2,000 outfits per month now, and are expected to grow to 5,000 outfits per month next year due to the implementation of this project.
Requirements
1. Present the organisation of the project management team and use relevant tools to demonstrate the project planning. (P14)
2. Review management information systems and suggest appropriate information processing tools for the operational, tactical, and strategic levels of an organisation. (P11)
3. Identify which information system your team is operating in and validate your answer. (M3)
4. Collect secondary economic data from media such as newspapers, magazines, TV, journals, etc., for the purpose of sales forecast. (P1)
5. Describe the process of such secondary data collection. (P2)
6. Justify your methodology in terms of: sources, relevancy, appropriateness, reliability. (P3)
7. Ocean Ltd.’s intelligence has collected information about the return on investment of one competitor who adopted a similar machine (but much less advanced than the machine of our interest) 2 years ago, as follows:
Month ROI (%) Month ROI (%)
1 2.36 13 3.46
2 5.73 14 2.64
3 6.6 15 3.63
4 10.05 16 3.44
5 5.13 17 9.49
6 1.88 18 4.9
7 2.52 19 7.45
8 2 20 20.23
9 4.69 21 3.91
10 1.91 22 1.7
11 6.75 23 16.29
12 3.92 24 5.52
25 1.44
Calculate representative values: Mean, Median, Mode, Quartile; and draw conclusions about the distribution of the sample. (P4)
8. Calculate the variance and standard deviation; and draw some statistical conclusions about the dispersion of this data sample. (P5)
9. Use histogram to illustrate your findings. (P7)
10. Have any of your findings in requirement 8 got any implications that might be useful for our project evaluation. (D3)
11. Based on the numerical data provided and the secondary data collected, make sales forecast for the coming 5 years and present it graphically. (P8)
12. Forecast the relation between the sales and marketing expenditure for the coming 5 years with sound validation, and use the appropriate technique to present it pictorially. (M2)
13. Calculate the correlation between sales and marketing expenditure based on your forecast in requirement 12. (P6)
14. Prepare a forecasted profit & lost account for the next 5 years, taking into account all potential operating costs; make relevant assumptions where necessary and justify them. (D2)
15. Assuming that the Net Profits from your forecast in requirement 14 are streams of cash-flow generated by this project and the machine’s life spans 5 years with no residual value; evaluate the viability of this project by using a variety of financial tools (assuming required rate of return to be 8% per annum). (P15)
16. Compare the results generated by the financial tools in requirement 15, select the one that you think is most applicable for the valuation of this project and defend your choice. (M1)
17. Review and evaluate inventory control systems in an organisation. (P12)
18. Prepare a spreadsheet to enable material planning for the manufacturing affiliate and calculate economic order quantities given the following information (P13):
• Each outfit requires 2 units of raw material
• Ordering cost and set-up cost: £ 5,000 per month
• Cost of holding each unit: £ 0.30 per month
19. Evaluate the project in sense of merits and limitations. (D1)
20. Prepare a formal business report including all the work that you have done. (P10)
21. Present this project orally to the General Director of the company (the lecturer) to persuade him to invest in this project or to recommend him against this project. (P9)
To tackle this case study, you will need to go through several steps and answer each question individually. Here is an outline of how to approach each question:
1. For question 1, you will need to present the organization of the project management team and use relevant tools to demonstrate project planning. This may involve creating an organizational chart and using tools like Gantt charts or project management software to show the project plan.
2. Question 2 requires you to review management information systems and suggest appropriate information processing tools for the operational, tactical, and strategic levels of an organization. This could involve identifying tools like CRM systems, ERP systems, data analytics tools, and reporting systems for each level.
3. In question 3, you need to identify the information system your team is operating in and validate your answer. This could involve evaluating the company's current information systems and determining which category they fall into (operational, tactical, or strategic).
4. Question 4 requires you to collect secondary economic data from media sources for the purpose of sales forecast. This can be done by searching for relevant articles, reports, or data sources that provide information on market trends, industry forecasts, or competitor performance.
5. In question 5, you need to describe the process of collecting secondary data. This may involve explaining how you conducted research, what sources you used, and any specific methods or tools employed.
6. Question 6 asks you to justify your methodology in terms of sources, relevancy, appropriateness, and reliability. Here, you will need to explain why the sources chosen are reliable, how they are relevant to the sales forecast, and why they are appropriate for the task.
7. For question 7, you need to calculate representative values (mean, median, mode, quartile) and draw conclusions about the distribution of the sample given. This involves analyzing the data provided and summarizing key statistical measures.
8. Question 8 requires you to calculate the variance and standard deviation and draw conclusions about the dispersion of the data sample. You will need to use the calculated values to assess the spread or variability of the data.
9. In question 9, you are asked to use a histogram to illustrate your findings from question 8. This involves creating a graphical representation of the data distribution using bins or intervals.
10. Question 10 asks if any findings in requirement 8 have any implications that might be useful for project evaluation. Here, you will need to analyze the findings from question 8 and determine if there are any insights or implications that can be applied to evaluating the project.
11. For question 11, you need to make sales forecasts for the coming 5 years based on the numerical data provided and the secondary data collected. You will then need to present the forecast graphically, such as in a line chart or bar chart.
12. Question 12 requires you to forecast the relation between sales and marketing expenditure for the coming 5 years and present it pictorially. You will need to use sound validation and an appropriate technique, such as regression analysis, to create the forecast and then present it graphically.
13. In question 13, you need to calculate the correlation between sales and marketing expenditure based on your forecast from question 12. This involves using statistical techniques, such as the correlation coefficient, to measure the relationship between the two variables.
14. Question 14 asks you to prepare a forecasted profit & loss account for the next 5 years, taking into account all potential operating costs. You will need to make relevant assumptions where necessary and justify them.
15. For question 15, you need to evaluate the viability of the project using a variety of financial tools, assuming a required rate of return of 8% per annum. This could involve calculating metrics like net present value (NPV), internal rate of return (IRR), and payback period.
16. Question 16 requires you to compare the results generated by the financial tools in question 15 and select the one that you think is most applicable for the valuation of this project. You will need to defend your choice by explaining why you believe it is the most appropriate tool.
17. In question 17, you need to review and evaluate inventory control systems in an organization. This could involve analyzing the current inventory management processes, identifying any inefficiencies or areas for improvement, and suggesting potential solutions or best practices.
18. Question 18 asks you to prepare a spreadsheet to enable material planning for the manufacturing affiliate and calculate economic order quantities. You will need to consider factors like order cost, setup cost, and holding cost to determine the optimal quantity of raw materials to order.
19. For question 19, you need to evaluate the project in terms of its merits and limitations. This could involve analyzing the potential benefits and drawbacks of the project, considering factors like market demand, competition, costs, and strategic alignment.
20. Question 20 requires you to prepare a formal business report that includes all the work you have done. This report should summarize the findings, analysis, and recommendations for the project.
21. Finally, in question 21, you need to present the project orally to the General Director of the company. This involves preparing a presentation that highlights the key points, arguments, and recommendations from your analysis, and persuading the General Director to invest in or against the project.
Remember to approach each question systematically, gather relevant data, analyze it using appropriate tools and techniques, and provide clear and concise explanations for your findings and recommendations. Good luck with the case study!