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Shuman Automobile
1) Issues:
Should we move to a structure that involves 3 profit centres? Should the service department be able to charge for internal work? It appears as if the accountant needs some training.
2) Background:
The owner is preparing to retire from actively running the business. As a result, he wants to gradually move away from day to day involvement. In order to do so, he sees a need for a formal control system to ensure the dealership will remain profitable. Current system is him personally controlling the activities of the business.
3) Environment/KSF
We don’t know a whole lot about the environment. We do know that Clark Shuman believes that success comes from pushing new car sales, and giving good customer service in order to get repeat business. Seems to be a successful business, staff seem to be committed. Price is critical in the car selling business.
Conclusion:
KSF – For whole company
Sell new cars – everyone should keep this in min. Competitive prices to keep customers happy. Good quality service at a reasonable price. Maintain a good reputation in the community.
KSF - New Car Sales
Offer good prices, easily negotiated by purchaser. Have stock on hand for customers to see/purchase. Make good trade in-deals, so the deal is profitable. Keep costs in mind – especially costs related to inventory.
KSF – Used Car Sales
Provide good estimates to new care dept on trade in values. Same as new car dept
KSF – Service Dept
Quality repair job. Good price – so must keep costs down. Service – turnaround time, provide rides, etc. Treat customers well.
4) Current MCS and its strengths and weaknesses
Old system was personal control by Clark Shuman. He watched all the transactions and made sure the proper decisions were made and helped work out differences between departments. If he is going to be less available, then it is time to develop a more formal system.
5) Analysis a. What is proposed change?
To a system
1) Issues:
Should we move to a structure that involves 3 profit centres? Should the service department be able to charge for internal work? It appears as if the accountant needs some training.
2) Background:
The owner is preparing to retire from actively running the business. As a result, he wants to gradually move away from day to day involvement. In order to do so, he sees a need for a formal control system to ensure the dealership will remain profitable. Current system is him personally controlling the activities of the business.
3) Environment/KSF
We don’t know a whole lot about the environment. We do know that Clark Shuman believes that success comes from pushing new car sales, and giving good customer service in order to get repeat business. Seems to be a successful business, staff seem to be committed. Price is critical in the car selling business.
Conclusion:
KSF – For whole company
Sell new cars – everyone should keep this in min. Competitive prices to keep customers happy. Good quality service at a reasonable price. Maintain a good reputation in the community.
KSF - New Car Sales
Offer good prices, easily negotiated by purchaser. Have stock on hand for customers to see/purchase. Make good trade in-deals, so the deal is profitable. Keep costs in mind – especially costs related to inventory.
KSF – Used Car Sales
Provide good estimates to new care dept on trade in values. Same as new car dept
KSF – Service Dept
Quality repair job. Good price – so must keep costs down. Service – turnaround time, provide rides, etc. Treat customers well.
4) Current MCS and its strengths and weaknesses
Old system was personal control by Clark Shuman. He watched all the transactions and made sure the proper decisions were made and helped work out differences between departments. If he is going to be less available, then it is time to develop a more formal system.
5) Analysis a. What is proposed change?
To a system