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Josh Denims

Autor:   •  February 7, 2018  •  1,250 Words (5 Pages)  •  521 Views

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- Provide Learning opportunities to the future executives:

Since the contract is going to be ongoing for 9 more months, there would be more opportunities to learn the financial aspects of the business.

- Quitting the business association with JOSH

- Maintain the Market reputation of ‘Logistics Solutions’:

This option would disrupt the image of the firm. It would create an image that the firm is not adaptable to changes and hence would degrade its reputation.

- Sustain the work and Financial Stability of the firm:

Terminating the business association would solve the issue of doing high complex work with the same remuneration for doing a relatively less complex work.

- Provide Learning opportunities to the future executives:

It would stop providing the learning opportunity it has been providing so far.

Recommendation

It is recommended to continue with the business and renegotiate with JOSH Denims after 9 months to compensate for the additional cost of Rs.18000 per month i.e. Rs.78000 per month

Action Plan

- Employ 5 more personnel for the additional work created by the policy change (exhibit 2)

- Ensure repackaging of 2500 cases to 3600 cartons be done before delivering them to the retailers

- Ensure the delivery to 180 retailers through proper carrier services

- After 9 months, renegotiate the terms and conditions of the contract to ensure a proper balance between the amount of work to be done and the remuneration that is given. Either one or both of them should be adjusted to match each other

* Number of words: 996

Exhibits

Exhibit 1

Revenue

Before July 99

After July 99

Monthly Remuneration

60000

60000

Expense/month

Warehousing

12000

12000

Manpower

18000

36000

Transportation

3600

3600

Electricity

1000

1000

Total Expense

34600

51600

Profit

25400

7400

Income statement of RDS

Exhibit 2

Manpower

Before July 99

After July 99

Manager

1

2

Store Keeper

1

2

Computer Operator

1

2

Packers

2

4

18000

36000

Personnel employed

Assuming that the extra work would require additional five personnel that is exactly twice as that required before, the total cost incurred for employment would be twice.

Exhibit 3

Revenue

Before July 99

After July 99

Retailers

3000000

3000000

Distributors(0.8*B2)

2400000

NA

Josh(0.925*B3)

2220000

2400000

Expense/month

Before July 99

After July 99

Transportation to distributors

34000

0

Transportation to retailers

0

54000*

Repackaging

3000

15000**

Security

2000

2000

Courier

3000

3000

Sales Tax and other expenses

1000

1000

Service tax

3000

3000

Total Expense

46000

78000

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