Loh Wan Ning HP: 9221 4135

BUSINESS COMPUTING 1 ISYS2056

LOH WAN NING S3417366 PRESENTS :

CRAZY CONS USED CARS

Workshop Lecturer: Dr Lawrence Sim Workshop Timing: 7 10pm

1 Loh Wan Ning S3417366

ISYS2056

Spreadsheet Report

Crazy Cons

Table of Contents
1 2 Executive Summary.............................................................................................................. 3 Body...................................................................................................................................... 3 2.1 Background ................................................................................................................... 3 2.2 Analysis ......................................................................................................................... 3 3 Recommendations ................................................................................................................ 4 3.1 Recommendation 1 ........................................................................................................ 4 3.2 Recommendation 2 ........................................................................................................ 4 4 Appendix .............................................................................................................................. 5 5 References ............................................................................................................................ 6

2 Loh Wan Ning S3417366

ISYS2056

Spreadsheet Report

Crazy Cons

1 Executive Summary
The Purpose of this Report is to explain the attached spreadsheet so that it may be used to its full potential. This report explains the purpose of how the spreadsheet and the results it has received can be able to help in the analysis of Crazy Cons Used Cars. The purpose of the report is to help Con, the owner of Craz y Cons Used Cars to conduct an analysis of the profitability and popularity of the cars sales. In this report, the issues, which Con has, would be identified and recommendations would be given to Con to assist him in making better decisions for a stronger sustainability for Crazy Cons. Researches will help Con see a bigger picture of how the productivity of his sales teams would affect the profits and how he can make adjustments accordingly to maximise his profits.

2 Body
2.1 Background
Crazy Cons Used Cars sells pre-owned cars. The owner of Crazy Con, Mr Con Constance, buys cars at Auction and sells them at a profit from his car yard in Melbourne. The types of car are mainly commercial, four wheel drive, hatch, prestige and sedan. Con employs three sales staff and they are paid a commission for each car they sell depending on the category of car sold as some cars required more skills to sell. Con has been keeping records of the cars sold manually.

2.2 Analysis
According to Cons accountant, Con is spreading his car stock too thinly, across too many categories/types of car with the given limited yard space. He also has been selecting cars based on the price and his assessment of the estimated profit. Hence, he failed to take into account the popularity of each model.

As shown in Appendix B, the most popular car is sedan whilst the most profitable car is prestige. However, sedan being one of the most popular cars sold is one of the least profitable cars sold. Comparing prestige and sedan, we can see that sedan sold twice as many as prestige but the profit earned for prestige is thrice as much as sedan. Prestige is the main contribution of the profits to the company and the highest paid commission as shown in
3 Loh Wan Ning S3417366

ISYS2056

Spreadsheet Report

Crazy Cons

Appendix A. The least profitable cars are commercial and sedan where they have the most number of days in the market.

From Appendix B, hatch and prestige are the fastest selling cars, with an average number of days of 4.50 days and 5.70 days respectively. The lower the days, the better the vehicles are selling well. With reference from Appendix C, sedan and commercial have shown a profit warning. A negative value in profit shows that sedan car sold at a lower price than the purchased price. The possible reasons could be that buyer is unwillingly to buy at such high prices or that Con over paid for the price of sedan in the market. Meanwhile, the highest profit earned from sales, with $4000 and above, was the rest of the cars majority earned from prestige and four wheel drive.

3 Recommendations
3.1 Recommendation 1
Con should set up an intranet to support inventory control, finances, staff sales and other business processes. Sales staff is able to record the details of the cars sold and they are able to track effectively on how they fair from the sales. Likewise, for Con, he is able to evaluate the performance of the staff as well as the inventory. For such system to be implemented, security must be in place. There should not have any loophole and proper concise trainings must be conducted to the staff. He should reward the top sales person in a yearly basis so that staff feels more motivated to sell more. An increase in productivity will lead to an increase in profitability of the company.

3.2 Recommendation 2
Con should consider specialising in hatch, four wheel drive and prestige instead. Commercial cars being one of the least popular car, sit on the market for as long as 155.80 days, are also the least profitable cars among all. Whereas for sedan, even though being the most popular cars, its profit earned is not even comparable to prestige. Hence, in the long term, commercial and sedan will not be beneficial for Crazy Cons as both has less impact on the profitability of the company as shown in Appendix D. Con should shift its focus on marketing its
4 Loh Wan Ning S3417366

ISYS2056

Spreadsheet Report

Crazy Cons

company specialising in the 3 categories. His purchasing of cars should be based on the demand of the car. As such, he will not experience many unsold cars sitting on his limited yard space.

4 Appendix

Appendix A

Car Type commercial four wheel drive hatch prestige sedan

Commission 4.00% 4.00% 3.00% 5.00% 3.00%

Appendix B

Appendix C

Appendix D
5 Loh Wan Ning S3417366

ISYS2056

Spreadsheet Report

Crazy Cons

Average profit by category

$7,000.00 $6,000.00 $5,000.00 $4,000.00 $3,000.00 $2,000.00 $1,000.00 $0.00 commercial four wheel drive hatch prestige sedan

5 Reference
Research Shows Higher Days Supply for Used Cars, viewed on 17 September 2013 http://usedcars.about.com/od/settingavalue/a/Research-Shows-Higher-Days-Supply-ForUsed-Cars.htm

6 Loh Wan Ning S3417366

ISYS2056

Spreadsheet Report

Crazy Cons

7 Loh Wan Ning S3417366

ISYS2056

Spreadsheet Report

Crazy Cons

8 Loh Wan Ning S3417366