Download - How Does Competitive Strategy Determine Business Processes and Structure of Information Systems?
Excel Presentation Chapter 3
Fig 3-10 Business Process & Information System for Bike Rental
© Pearson Prentice Hall 2009 3-2
Each business must first analyze its industry and choose a competitive strategy. Will it be a low-cost provider or differentiate its products from competitors?
Then it must design its business processes to span value-generating activities.
Once those decisions have been made, a business can structure an information system that supports its business processes.
© Pearson Prentice Hall 2009 3-3
Resort Bicycle Rental
Bicycle Inventory Valuation
Monday, October 29, 2007
Make of Bike Bike Cost Numberon Hand
Cost of CurrentInventory
Number ofRentals
Total RentalRevenue
Revenue per Bike
Revenue as percentof Cost of Inventory
Wonder Bike $325 12 $3,900 85 $6,375 $531 163.5%
Wonder Bike II $385 4 $1,540 34 $4,570 $1,143 296.8%Wonder Bike Supreme $475 8 $3,800 44 $5,200 $650 136.8%
LiteLift Pro $655 8 $5,240 25 $2,480 $310 47.3%
LiteLift Ladies $655 4 $2,620 40 $6,710 $1,678 256.1%
LiteLift Racer $795 3 $2,385 37 $5,900 $1,967 247.4%
Resort Bicycle Rental
Bicycle Inventory Valuation
Monday, October 29, 2007
Make of Bike Bike Cost
Numberon
Hand
Cost of Current
Inventory
Rent Price
Number of
Rentals
Total Rental
Revenue
Revenue per Bike
Revenue as percent
of Cost of Inventory
On Hand to Rentals
Ratio
Gross Profit
Wonder Bike $325 12 $3,900 $75.00 85 $6,375 $531 163.5% 14.1% $2,475
Wonder Bike II $385 4 $1,540 $134.41 34 $4,570 $1,143 296.8% 11.8% $3,030Wonder Bike Supreme $475 8 $3,800 $118.18 44 $5,200 $650 136.8% 18.2% $1,400
LiteLift Pro $655 8 $5,240 $99.20 25 $2,480 $310 47.3% 32.0% -$2,760
LiteLift Ladies $655 4 $2,620 $167.75 40 $6,710 $1,678 256.1% 10.0% $4,090
LiteLift Racer $795 3 $2,385 $159.46 37 $5,900 $1,967 247.4% 8.1% $3,515
Average per Bike $548 6.5 $3,248 $125.67 44.2 $5,206 $1,046 191.3% 15.7% $1,958
Total $3,290 39 $19,485 $754.00 265 $31,235 $6,278 160.3% 14.7% $11,750
1. Sell all LiteLift Pro’s because the product does not rent well even with a lower price and has lost Resort Bicycle Rental money.
2. If stock outs have lost them money they should buy more LiteLift Racer’s and maybe LiteLift Ladies and Wonder Bike II also.
3. To set productivity Benchmarks for every product to meet like:
Revenue as percent of Cost of Inventory to be over 200%.
Resort Bicycle Rental
Bicycle Inventory Valuation
Monday, October 29, 2007
Make of Bike Bike Cost
Numberon
Hand
Cost of Current
Inventory
Rent Price
Number of
Rentals
Total Rental
Revenue
Revenue per Bike
Revenue as percent
of Cost of Inventory
On Hand to Rentals
Ratio
Gross Profit
Wonder Bike $325 12 $3,900 $75.00 85 $6,375 $531 163.5% 14.1% $2,475
Wonder Bike II $385 4 $1,540 $134.41 34 $4,570 $1,143 296.8% 11.8% $3,030
Wonder Bike Supreme $475 8 $3,800 $118.18 44 $5,200 $650 136.8% 18.2% $1,400
LiteLift Ladies $655 4 $2,620 $167.75 40 $6,710 $1,678 256.1% 10.0% $4,090
LiteLift Racer $795 3 $2,385 $159.46 37 $5,900 $1,967 247.4% 8.1% $3,515
Average Per Bike $527 6.2 $2,849 $130.96 48.0 $5,751 $1,194 220.1% 12.4% $2,902
Total $2,635 31 $14,245 $654.80 240 $28,755 $5,968 201.9% 12.9% $14,510