Josh Denims
Autor: Joshua • February 7, 2018 • 1,250 Words (5 Pages) • 451 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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