Las Vegas Store
While overlooking the data presented from last years’ financial records of all 21 Consolidated Western Wear Retailers there were a couple of stores that stood out the most when it came to the purchasing department costs. The Las Vegas store to be exact gave much misleading information as it was only active for 8 of the 12 months due to a fire and all of it’s merchandise being destroyed. This skewed the data in lesser value than should be present, so in order to grasp a better yearly understanding the Las Vegas store was removed from the final analysis. In the analysis of all stores, including Las Vegas, there were three main cost drivers that data was gathered on, which first included Purchase Department Cost Vs Merchandise Purchased which
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In the first cost analysis of Purchase Department Cost Vs Merchandise Purchased the new model stated, y = 0.0014x + 1032703, R² = 0.0093. The second model of Purchase Department Cost Vs Number of Purchase Orders showed, y = 105.57x + 858839, R² = 0.2083. Lastly, in the cost analysis of Purchase Department Cost Vs Number of Suppliers the model stated, y = 6393.2x + 434286, R² = 0.5159. Still true, the best model is Purchase Department Cost Vs Number of Suppliers and once the Las Vegas store was removed the R2 drastically increased by 0.2719 giving more evidence to conclude that the highest cost driver is the number of suppliers that CWWR are using all throughout their stores. Seen in Chart 3 the regression model shows the correlation of the cost driver to the department in which the data points give a linear appearance proving the connection. In efforts to bring these cost drivers down the conclusion to cut some of the suppliers from stores there would be a drastic decrease in the departments costs. Also, another idea in order to cut down the costs of Purchasing Departments would be to reduce the number of departments as a whole and create a new system in which near by stores used the same Purchasing Department along with a multi-level management team to approve all
In the first cost analysis of Purchase Department Cost Vs Merchandise Purchased the new model stated, y = 0.0014x + 1032703, R² = 0.0093. The second model of Purchase Department Cost Vs Number of Purchase Orders showed, y = 105.57x + 858839, R² = 0.2083. Lastly, in the cost analysis of Purchase Department Cost Vs Number of Suppliers the model stated, y = 6393.2x + 434286, R² = 0.5159. Still true, the best model is Purchase Department Cost Vs Number of Suppliers and once the Las Vegas store was removed the R2 drastically increased by 0.2719 giving more evidence to conclude that the highest cost driver is the number of suppliers that CWWR are using all throughout their stores. Seen in Chart 3 the regression model shows the correlation of the cost driver to the department in which the data points give a linear appearance proving the connection. In efforts to bring these cost drivers down the conclusion to cut some of the suppliers from stores there would be a drastic decrease in the departments costs. Also, another idea in order to cut down the costs of Purchasing Departments would be to reduce the number of departments as a whole and create a new system in which near by stores used the same Purchasing Department along with a multi-level management team to approve all