Kamron’s Supply, Inc. provides cleaning supplies to the automobile detailing industry. The most popular product is an all-in-one detailing package with several types of cleaning agents, wax, towels, and supplies. Kamron’s purchases the all-in-one boxes wholesale by the crate. The cost of each crate (50 all-in-one boxes) is $1,950.
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Required information:
- Determine the operating income of each of the five retail customers. Explain the
results.
- How does this data inform decisions on customer targeting, customer retention, and
sales? As a general manager of Kamron’s, how would you evaluate the delivery service
and sales force?
- What approach would you take going forward with Wildcat Motors and Greyhound
Classic Cars?
Follow the instructions you see on the Data tab of the worksheet. Show all calculations within the cells of the Excel spreadsheet (accessed through Module 1 or by clicking “Next” at the bottom of this page). This means that you must use formulas and links so that your thought process can be examined.
Review the grading rubric to understand how you will be graded on this assignment. Reach out to your instructor if you have questions about the assignment.
Submit your downloaded and completed Excel file with your name added to the file name for grading by your instructor to the CT Assignment area in Module 1.
2
>Data
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Kamron’s Supply, Inc. provides cleaning supplies to the automobile detailing industry. The most popular product is an all-in-one detailing package with several types of cleaning agents, wax, towels and supplies. Kamron’s purchases the all-in-one boxes wholesale by the crate. The cost of each crate (
|
| 5 |
| 0 |
all-in-one boxes) is $
| 1 |
,9
50 |
. The list sale price of the all-in-one box is $
|
|
|
|
| 6 |
|
| 4 |
.
|
| Customer |
|
| Raven used cars |
| Bear’s Auto |
| Wildcat Motors |
| Greyhound Classic Cars |
| Colt Auto |
| All-in-one Detail Kits (in boxes) |
1
| 7 |
2
| 26 |
7
7
|
|
| 12 |
417 |
257 |
| List selling price |
64 64 64 64 64
| Actual selling price |
| $ 54.00 |
$ 5
|
|
|
|
| 3 |
.20
$ 49.50 |
$ 54.00
$ 53.50 |
| Number of shipments |
3 4 26 3 3
|
|
| Sales calls |
3 5
36 |
4 12
| Number of deliveries |
3 7
22 |
1 5
| Miles traveled per delivery |
14 |
4 50 6 12
|
|
| Customer appreciation days |
1 2 12 0 0
| Cost drivers for each activity: |
| Activity |
Cost-Driver Rate |
|
| Deliveries |
$3 per delivery mile traveled |
|
| Product handling |
$0.90 per box sold |
|
| Packaging |
$14 per shipment |
Sales calls
| $140 per sales call |
Customer appreciation days
| $250 per day |
Required 1
Customer
Raven used cars Bear’s Auto Wildcat Motors Greyhound Classic Cars Colt Auto
| Revenues at list prices |
| Discount |
| Revenues (at actual prices) |
| Cost of good sold |
| Gross margin |
| Customer level operating costs: |
Packaging
Sales calls
Deliveries
Product handling
Customer appreciation days
| Total |
| Customer-level operating income |
| Explain the customer profitability data (what is this data telling us?). Be thorough and specific: |
Requirement 2
| What value is there to management in reporting both the list selling price and the actual selling price for each customer? |
| How does this insight relate to the performance evaluation of the sales department? |
Requirement 3
| What issues from the data should managers consider in deciding whether to make adjustments or drop any of these customers? |
