Resort Bicycle Rental Excel Learning Aid Page 87 MGS GROUP C

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Resort Bicycle Rental Excel Learning Aid Page 87 MGS 3040-03 GROUP C Justin Bornstein Dagmara Galik Svitlana Panasik Ulascan Senger

Inventory Formulas in Use

Using Excel for Inventory These formulas are used to analyze the Resort Bicycle Rentals. Cost of Current Inventory=Bike Cost x Number on Hand Revenue per Bike=Total Rental Revenue/Number on Hand Revenue as a Percent of Cost of Inventory=Total Rental Revenue/Cost of Current Inventory

Other Formulas Value of Inventory= Sum of the Cost of Current Inventory Average aggregate inventory value = # of units on hand x total value of units The average aggregate inventory value is the total value of all items held in inventory by a firm. Inventory turnover = # of Rentals / inventory on hand To improve inventory turns, managers should look at popularity of their bikes; which bicycle is being rented the least and the most often Total value tells managers how much firm’s assets are tied up in inventory. Total business revenue= Sum of the Total Rental Revenue of each bike Net Income= Total Business Revenue- Average Aggregate Inventory Current Return on Asset= Net Income / Average aggregate Inventory

Showing New Calculations

Managerial Critical Thinking

Critical Thinking and Decision Making for Resort Rental Bicycle Effective decision makers are those the rare individuals who are able to consistently identify and choose the best option among multiple alternatives and the provided data. Looking at the new data for Resort Rental Bicycle business, removing the LiteLift Pro branded bike will increase the overall revenue and save costs in total inventory.

Manager’s Decisions Decisions and conclusions that may be drawn from the data: LiteLift Pro bike should be discontinued from the rental Revenue not high enough to cover costs and make profits Should invest in buying bikes that generate higher revenues: Wonder Bike II, LiteLift Laders and LiteLift Racer Decision whether the aggregate value is too low or too high by historical or industry comparisons or by managerial judgment Reducing aggregate inventory investment will increase ROA. Objective: to have the proper amount of inventory not the least amount of inventory