Dakota Office Products Case Study Solution
Customer B Profitability:
=$104000+85000+19000+24158
=$5158
Customer B Relative%
=122.4% + 100.0% + 22.4% + 28.4%
= -6.0%
Inference:
It has been seen that the the customer B has higher profitability as compared to customer A as it orders the small amount of orders in numerous times which increases the profitability of the company through transportation costs and dealing. This will lead the company’s profitability to rise through delivery and transportation cost procedures. In this way the “B” shows higher profitability and the less relative %.
ANSWER NO 4
The nature of the orders decree by clients has the everlasting effects on the financial conditions of the company. There are certain ways through which the company can generate higher revenues from the clients. For example if the client orders small amount of products through several delivery options, it can lead the company to generate higher revenues through delivery and transportation costs.
In this case, the client B orders small quantity of products in countless orders, which builds the expense of the organization by excess of transportation and cost dealing. Though, the client A orders the enormous measure of small number of orders which thus builds the benefit. In this way the company can generate higher financial standards through client B as compared to client A. The client B is charged higher overall revenues than client A because of absence of cost examination inside the organization. However, due to lack of losses in cost analysis of company, the organization is experiencing misfortunes with the client B.
Another disadvantage of offering items to client B is that the client pay backs inside 90 days, which expands the expense of organization to hold its items and cash which at last builds the organization's functioning capital premium on its items.
ANSWER NO 5
The competitive environment of any company has the greater significance in the financial condition of the company. The company must have to be extremely careful in handling the competitive rivalry to hold the greatest worth in the market.As the company is working in competitive environment, so it must have a lot of competitors which makes them a less consequential in the market.
The Dakota Company is selling the usual products such as pens and pencils, which are most likely to be found in almost everywhere, having a lot of competitive environment. Therefore these products have less margins of profitability for the company. If the company ask for greater margin, the buyer may shift towards the other competitive brands. So it is very important for the company to provide higher quality products in less reasonable price so that the customer maynot shift towards another brands.
Also, One of the major feature of dealing with competitive brands is to produce newer products than usual in reasonable prices and greater quality. In this way, it will help the customer’s to attract towards company.
ANSWER NO 6
The natures of an order of customer has the significant effect in the profit of the company. For example, the customer B orders the product in small quantities which increases the margin of the company through regular transportation costs and handling, whereas the customer A orders the product in bulk amount which decreases the profit margin for the company as compared to customer B. In this way, the costs of transportation of customer B helps the company to achieve higher profit through multiple delivery states.................
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