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Team eleventh-hour Solution

F
Fara Ul Fath Shawron

This document summarizes the problems and proposed solutions at a gas station and convenience store. It identifies issues like a lack of computerized inventory tracking, outdated financial statements, and underutilized space. Solutions proposed include implementing a computerized system to improve bookkeeping and inventory management, reducing slow-moving magazine and deli inventory, and opening a camera franchise and postal service in unused space to generate additional revenue.

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SUMMARY Cooper Pipeline Limited (Pipeline) was a modem, Canadian Natural Resource Ltd. Gas bar and convenience store. Has fifteen employees, six full-time and nine part-time. Gives 24 hours service, 365 days a year. Employees ranged in age from 18 to 22 years and were paid $4.25 to $4.75 an hour, had no special skills beyond working in the counter or parking gas. Owner, Mike relied on his retired father-in-law to assist in scheduling employees, counting the cash, and making the daily bank deposits. Accounting information and financial statements, provided by a local chartered accountant, were generally three months old. There were only two accounting departments for the whole operation, one for gasoline, and the other for everything in the store. It is a building of approximately 3000 square feet with a total of eight gas pumps, four self-service, and four full-service. The northeast corner of the building is the focal point for an eating area of approximately 500 square feet but is rarely used. Only seven parking spaces on the north side of the building for customers shopping in the convenience store. But as customers receive fast service, traffic tie-ups and potential resulting frustrations were usually avoided. No systematic inventory control system. The store carried deli and dairy products, groceries, snack foods, magazines, automotive supplies, beer, lottery tickets, health and beauty products, seasonal items, and tobacco. Some products in the store were moving much slower than others especially the deli counter and the magazine racks. Competitions : Two gas bars with large convenience stores operated by Metro-Canada, and Irving, two gas bars with service bays owned by Esso and Gulf, and two convenience stores all within a distance of less than one kilometer.
Concentration of competition has led to some very keen pricing on certain high-volume items such as tobacco products. PROBLEM IDENTIFICATION PROBLEMS SYMPTOMS No computerized AIS Failing to estimate the profitability of goods Three months old info in financial statement Less info and control Inability to determine profitability of products Manual counting of shelves is needed Slow moving inventories (Deli and magazine rack) Added cost for unsold magazines Wastage of food items Supply of magazine is much higher than the requirements Unused space Need for expanding other business OBJECTIVES 1. Solve problems of inventory management and bookkeeping 2. Speed up inventory for Magazines and Deli Counter 3. Make proper utilization of the free 500 square feet space
SOLUTIONS OBJECTIVE 01 Solve problems of inventory management and bookkeeping Proposed Solution : Use a computerized system for monitoring and scheduling Benefits : Can easily keep track of inventory and determine EOQ Can determine profitability for different products Can keep track of transactions and assist in up-to-date bookkeeping Can facilitate daily operations and improve efficiency OBJECTIVE 02 Speed up inventory for Magazines and Deli Counter Proposed Solution : Reduce supply of magazines and allocate labor to Deli counter Benefits : No more overstocking of magazines Reduced charges for unsold magazines Additional labor can speed up the process at the Deli counter Computerized system can be used to determine the profitability and demand of different magazines, to determine which need to stocked and which need to be removed OBJECTIVE 03 Make proper utilization of the free 500 square feet space Alternatives :
1) Japan Camera Franchise and an over-the-counter postal franchise 2) Own photo finishing center with equipment from Kodak and an over-the- counter postal franchise Proposed Solution : Japan Camera Franchise and an over-the-counter postal franchise. Additionally, 2 employees should be hired run operations smoothly. Justification : The brand value of the franchise will attract customers easily, ensuring a stable figure of sales by the end of the year, whereas having his own business may not prove profitable Equipment and ingredients can be managed easily Having dedicated employees can run operations effectively, ensuring customers wont have to wait in the parking space, therefore reducing the need for additional parking space Total sales from Photo finishing center = $250,000. Net Profit = $26,750 (according to exhibit) Total sales from Postal franchise = ($1,513per sq. feet *150 sq. feet) = $226,950 (according to exhibit)

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Team eleventh-hour Solution

  • 1. SUMMARY Cooper Pipeline Limited (Pipeline) was a modem, Canadian Natural Resource Ltd. Gas bar and convenience store. Has fifteen employees, six full-time and nine part-time. Gives 24 hours service, 365 days a year. Employees ranged in age from 18 to 22 years and were paid $4.25 to $4.75 an hour, had no special skills beyond working in the counter or parking gas. Owner, Mike relied on his retired father-in-law to assist in scheduling employees, counting the cash, and making the daily bank deposits. Accounting information and financial statements, provided by a local chartered accountant, were generally three months old. There were only two accounting departments for the whole operation, one for gasoline, and the other for everything in the store. It is a building of approximately 3000 square feet with a total of eight gas pumps, four self-service, and four full-service. The northeast corner of the building is the focal point for an eating area of approximately 500 square feet but is rarely used. Only seven parking spaces on the north side of the building for customers shopping in the convenience store. But as customers receive fast service, traffic tie-ups and potential resulting frustrations were usually avoided. No systematic inventory control system. The store carried deli and dairy products, groceries, snack foods, magazines, automotive supplies, beer, lottery tickets, health and beauty products, seasonal items, and tobacco. Some products in the store were moving much slower than others especially the deli counter and the magazine racks. Competitions : Two gas bars with large convenience stores operated by Metro-Canada, and Irving, two gas bars with service bays owned by Esso and Gulf, and two convenience stores all within a distance of less than one kilometer.
  • 2. Concentration of competition has led to some very keen pricing on certain high-volume items such as tobacco products. PROBLEM IDENTIFICATION PROBLEMS SYMPTOMS No computerized AIS Failing to estimate the profitability of goods Three months old info in financial statement Less info and control Inability to determine profitability of products Manual counting of shelves is needed Slow moving inventories (Deli and magazine rack) Added cost for unsold magazines Wastage of food items Supply of magazine is much higher than the requirements Unused space Need for expanding other business OBJECTIVES 1. Solve problems of inventory management and bookkeeping 2. Speed up inventory for Magazines and Deli Counter 3. Make proper utilization of the free 500 square feet space
  • 3. SOLUTIONS OBJECTIVE 01 Solve problems of inventory management and bookkeeping Proposed Solution : Use a computerized system for monitoring and scheduling Benefits : Can easily keep track of inventory and determine EOQ Can determine profitability for different products Can keep track of transactions and assist in up-to-date bookkeeping Can facilitate daily operations and improve efficiency OBJECTIVE 02 Speed up inventory for Magazines and Deli Counter Proposed Solution : Reduce supply of magazines and allocate labor to Deli counter Benefits : No more overstocking of magazines Reduced charges for unsold magazines Additional labor can speed up the process at the Deli counter Computerized system can be used to determine the profitability and demand of different magazines, to determine which need to stocked and which need to be removed OBJECTIVE 03 Make proper utilization of the free 500 square feet space Alternatives :
  • 4. 1) Japan Camera Franchise and an over-the-counter postal franchise 2) Own photo finishing center with equipment from Kodak and an over-the- counter postal franchise Proposed Solution : Japan Camera Franchise and an over-the-counter postal franchise. Additionally, 2 employees should be hired run operations smoothly. Justification : The brand value of the franchise will attract customers easily, ensuring a stable figure of sales by the end of the year, whereas having his own business may not prove profitable Equipment and ingredients can be managed easily Having dedicated employees can run operations effectively, ensuring customers wont have to wait in the parking space, therefore reducing the need for additional parking space Total sales from Photo finishing center = $250,000. Net Profit = $26,750 (according to exhibit) Total sales from Postal franchise = ($1,513per sq. feet *150 sq. feet) = $226,950 (according to exhibit)