Rahul decided to start a desert cooler manufacturing business. He sets the target of earning 20% profit on sales in the first year. He was very much concerned about the future prospects of the business, which were uncertain. For this, he gathered information from the potential market and analyzed that the demand forwall mounted coolers is increasing day by day. He used this information as the base for future planning. On the basis of the gathered information, he called a meeting in the following week to find new methods to achieve the objective. a) Identify the function of management involved in the above case. b) Enumerate the next two steps, which have been followed by Rahul that are related to the process of one of the functions of management.
Answers
As Rahul started a business, he needs to take care of many factors which are very strong reasons for driving the whole business, in a right direction.
First thing which should Rahul be cautious about is the inventory handling strategies, which effects a lot to the business process, the second point comes is regarding the the way of presenting his products, to his prospective customers.
a) Identification of the functions of management involved in the above case as follows:
1) Identifying the reputed desert cooler manufacturers and direct his marketing team to visit the manufacturing company and prepare a capital cost estimate
2) Identification of potential client who is the leading purchaser of dest cooler such as ice cream factories, ice cream par; ours, reputed caterers who supply foods in big events, e-commerce industries etc.
3) Market study and data collection from potential clients,
4) Financial analysis to be performed to estimate the profitability comprising :
5) R.O.I, ie. return on investment,
6) Break-even point analysis
7) Estimation of the internal rate of return.
b) Two Subsequent steps, which have been followed by Rahul that are related to the process of one of the functions of management.
1) identification of potential sources of financing for purchasing of the desert cooler machinery.
2) Project scheduling
3) cash flow