CASE 4: D & C WASH SERVICES

BJMP 5023

Discussion Questions
1.

How might the strategy, mission, competitive priorities, and customer

benefit package of this business affect their technology decisions?
The D & C Car Wash starts up the business with an idea of providing
superior customer service where customer can enjoy a premium car
washing experience.
Therefore, they need to understand the technology to be used in their
business because it neither managers nor employees can do their jobs
successfully without it and furthermore, the application of technology to
specific business needs is often viewed as a key component of the
business strategy.
If their mission and strategy are to provide premium car washing
experience to customers, and they emphasize on quality but with lower
cost charges to customers, they must look for a technology which can
offer premium car wash experience to customers and customer can
satisfy with the quality of the service. Whether they want to invest in the
expensive machine or not will also depend on the initial cost they would
like to invest.
The customer benefit packages also can affect their technology decision.
They can purchase the expensive machine which can offer variety of
services or variant to customers or they can just purchase a simple
machine which can only offer primary services to customers.

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CASE 4: D & C WASH SERVICES

2.

BJMP 5023

What issues and problems should be anticipated with managing this

business, particularly with respect to technology? What roles does
operations play in successfully handling these issues and problems?
Issues and problems that should be anticipated with managing business,
particularly with respect to technology are:
a. Higher employee skills level required such as information technology
and service management skills.
b. Integration of old (legacy) and new technology and systems
c. The machine that they use to wash the vehicles is breakdown and
part shortages will impact the performance of their car wash to give
a superior service to their customers. When the demand is high and
the machine breakdown, they cant give the service to customer
and they will loss.
d. The maintenance of the machine and robotic that they use. If we
use the high technology machine, the maintenance also always is
high. That means it will increase the cost of maintenance.

To solve these issues and problems, operations:

a. There have been advancements made in water treatment; car
cleaning chemicals, and nearly every aspect of car washing has
made major advancements from the ground up. This will reduce
time for car wash services.
b. Successful car wash operations make use of remote equipment
monitoring software programs that can send a text message or ring
a pager when an equipment failure occurs or if soap levels drop
below a preset level. Wash operators can expect to make more
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CASE 4: D & C WASH SERVICES

BJMP 5023

money with reduced down times and increase the life span of their
equipment by catching malfunctions early on before they lead to
major repairs.
c. Carwash operators can save time by utilizing the flexible and
increased throughput capabilities of new carwash equipment
designs, including man/machine communication interfaces.
d. Increasing car wash efficiency and the mode of how the owner
interface with the machinery on a daily basis can directly translate
into time savings. Although not completely related, these timesaving tasks translate into net cost decreases.
3.

What does a break even analysis indicate about this business venture?
Should Drew and Caroline go into this business?
Break even point is the level of sales where profits are zero. Therefore the
break even point can be computed by finding that point where sales just
equal the total of the variable expenses plus fixed expenses and profit is
zero.

Forecasted Revenue for typical modern car: $22 X 20,000 cars = $ 440,000
Operating costs
Chemicals and Utilities

$ 30,000

Sludge Removal

$ 4,000

Maintenance, Insurance and Advertising

$ 12,000

Accountant, Attorney and merchant fees

$ 6,000

Labor

$ 170,000

Office expense including telephone, photocopying etc

OPERATIONS AND TECHNOLOGY MANAGEMENT

6,000
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CASE 4: D & C WASH SERVICES

BJMP 5023

Mortgage

$ 72,000

Car damage expense (0.008)*($22)*(20,000)

Total Operating costs

$ 303,520

3,520

The breakeven number of cars:

Assuming x = number of cars required to breakeven
22x = 1.50x + 0.176x + 270,000
20.324x = 270,000
x = 270,000/20.324
x = 13,284.78 cars
x= 13, 285 cars

Net Profit = Forecasted Revenue Operating costs

= $ 440,000 - $ 303, 520
= $ 136,480.00
Since the company only requires 13,285 cars to breakeven, it is advisable for
Draw and Caroline go into the business. Furthermore, based on the average
number of car of 22,000, it is expected that their company can make profit of
$136,480.
Prepared By:
GROUP MEMBER

MATRIC NO

YOSMAN BIN HUSSIEN

804020

NORANIDA DAUD

805491

MOHAMMED ABDULWALI AL SAMAWI

801203

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