Reference no: EM132069519

Case Study

Please read through the following case study.  Reflect on your learning and your own research within this unit. 

Prepare a response that responds to each of the issues presented below. Your responses must reflect your knowledge, skills, and application for this unit. 

Task one

John works in a factory that makes mountain bikes. In June, 100 bicycles are made at a cost of $100.00 per bicycle. In July, another 100 bicycles are made at a cost of $110.00 per bicycle. In August, 150 bicycles are made at a cost of $120.00 per bicycle.

In September, John wants to sell 100 bicycles at an average cost.

1. What is the average cost of each bicycle and the total sale amount (if he were to sell at cost price)?

2. What is the value of the remaining stock at the average cost?

3. How do you calculate the average cost of a product?

Task two

Michelle works as a buying officer in a large hardware store. Every month, she has to replace sold stock and order new products. She also orders general supplies for the office and staff.

This month Michelle needs to order paint and is told by the supplier that a bulk purchase discount of 10 per cent will apply if she orders a pallet of each paint type. The paint usually costs $25,000. She also has to order some outdoor furniture from a new supplier. The supplier tells her that if she orders over $10,000 worth of stock, he will give her a 10 per cent discount. Michelle is ordering $10,500 worth of stock this month.

Michelle receives a bill from the power company that offers a five per cent discount if the bill is paid within seven days. The bill is for $2,500. A staff member tells Michelle that the local supermarket has a half-price sale on coffee and tea products that the staff prefer to drink. These supplies cost $400 to replenish quarterly.

If Michelle took advantage of all of the specials, how much money could she save the company?

Task three                       

You work as the purchasing officer for a medium-sized Safety Solutions business that sells safety products (Protective Equipment) to its clients as part of its exclusive product range. Your main clients are workers at the nearby mine and you are the only distributor of safety gear in the area. Your organisation usually buys the PPE hard hats wholesale from a company based in the nearest capital city 500km away in boxes of 30 units each and resells them at $50.00 per unit with a mark-up of 100%. On average, they sell 10 items of 'Product A' and 45 items of 'Product B' over a two-week period. The stock control system is configured to keep only one month of stock on hand. Stocks are replenished monthly.

You have been looking at your perpetual stocktaking system and have noticed that 'Product A' is often out of stock for periods of up to two weeks. You have also noticed that 'Product B' stock levels are often down to less than 5 boxes when re-stocking orders are placed.

Prepare a short report that contains responses to the following points. Make sure that your report is accurate, brief and written clearly using plain English.

1. What information would you need before advising your supervisor about future purchase requirements?

2. Outline the advice you would give to your supervisor about the situation with the product line.

3. Are there any legislative requirements to take into consideration?

4. What recommendations would you give to improve organisational procedures for record keeping?

5. Describe the different ways in which your supervisor could present your report contents to relevant stakeholders within the organisation.