Simulation Analysis of the Auto Motives Models Offered by the Team of Supreme Auto Mobile Company
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Added on 2020-07-23
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||Round 2 | ||Production |Sales|Unsold stock | |Optimums |174900 |174900 |0 |Grand |17245|17245|0 | According to the output of Round to forecasting, It has been evaluated that, the Supreme will increase its production of both the models as the sales are increasing as per the production.
Simulation Analysis of the Auto Motives Models Offered by the Team of Supreme Auto Mobile Company
Added on 2020-07-23
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Assignment B
Table of ContentsINTRODUCTION...........................................................................................................................3Company performance................................................................................................................3Learning....................................................................................................................................12Conclusion ................................................................................................................................17Team Performance....................................................................................................................17REFERENCES..............................................................................................................................20
INTRODUCTIONThe report will examine the simulation analysis of Supreme Auto mobile company doneby the team to forecast the sales and productivity of the auto motives models offered by theenterprise. The report will evaluate the objectives of the company which are attaining 2.5 marketshare for medium car and 2.3 market share of luxury car. Further, the objectives of the companyare based on its all departments such as decrease cost of cars by 2 percent, increase the grossmargin by 3 percent, to increase the sale of car by 5 percent, to incest 30% in promotion budget,to ensure staff satisfaction and customer satisfaction by decreasing number of warranty claims by2%. Moreover, the report will examine the results of simulation analysis performed by the teamin all four rounds. The report consist of two reflection trends based on learning and teamperformance of Supreme. Henceforth, the report will examine and evaluate results round byround which will state that company should make optimum utilisation of resources in order toattain profitability.Sales725.87Cost of Sales*492.44Gross Profit (Loss)233.43Fixed Overheads53.41Stock Upkeep Cost0Product Recall Cost0Promotion-95Research and Development146.05Professional Charges0.26Warranty Claims0.92Training Cost0.31
Company performanceRound 1Production SalesUnsold stockOptimums 1495001495000Grand 15750157500According to the simulation output, team evaluated that the Supreme has two modelsOptimums and Grand, where are the company is producing 149500 Optimums in which leftunsold stock is 0, whereas the grand model has a total production of 15750 that is less thanoptimums but still the firm is doing food and completed the sales as per the produced automotives. Besides, as per the team analysis the firm offered optimums at 17399 pounds and grandat 60899 pounds.Round 2Production SalesUnsold stockOptimums 1749001749000Grand 17245172450According to the output of Round to forecasting, It has been evaluated that, the Supremewill increase its production of both the models as the sales are increasing as per the production.Moreover, as the analysis it can be said that the company has increased its production of modelsby 25400 for optimums and 1495 for Grand. Besides according to the team evaluation it can beconcluded that the sales of the organisation is matching the production level of Cars. Therefore,in next round the Supreme is planning to launch the new model of Auto motives in order toincrease its product demand according to the market fluctuation and customer demand. Round 3Production SalesUnsold stockOptimums 1749001749000Grand 17245172450Hence, in round 3, the team analyses that the auto mobile enterprise in planning to launchthe new card according to the needs and wants. Therefore, in this the company do not increasethe production of old motives that is optimums and Grand because Supreme evaluated that newmodel will need high amount of investment and bank loans which will further increase the debtand interests on the enterprise.
Round 4Model NameProducedSoldIn StockOPTIMUMS1744501744500GRAND17200172000DRIFT87000870000According to the evaluation, the team identified that till Round 4 the company willlaunch the new model which is Drift and as per the analysis it is noted that the production of driftwill be 87000 and will be completely sold that is the new model will be beneficial for supreme.round 1round 2round 3Round 4Difference 1 to 2DIFFERENCE 2 TO 3Difference 3 to 4Outstanding Debt £m193389.85694.68875.8196.85304.83181.12Return On Assets %12.7514.636.365.011.88-8.27-1.35Current Ratio0.840.961.32.050.120.340.75Gross Margin %24.2825.6123.2419.721.33-2.37-3.52Quick Ratio0.840.961.32.050.120.340.75Post Tax Profit / Sales %2.843.961.91.781.12-2.06-0.12Liquidity Ratio0.020.150.471.250.130.320.78Profit / Employee £46378.4275142.3437231.7936617.0428763.92-37910.55-614.75Return on Shareholders Funds %16.8522.0311.59.625.18-10.53-1.88Business objectivesMarket shareTo achieve the 2.5% of market share for the medium car, at the end of year 1 and increaseit by 0.5% annually.
To gain the 2.3% of market share for the luxury car, at the end of year 1 and increase itby 0.3% annually.Financial To decrease the cost of the cars in 2% by scale economies, for the second year.To increase the gross margin of the company by 3% for the second round and to have anannual growth of 0.5% in the consecutive years.To rise the ROA in 2% and ROE in 3% by the end of second round, and rise this rates by1% the next years.Sales and marketingTo increase the number of cars sold by 5% the next year, and 3% the upcoming years.To invest 30% of the total of the promotion’s budget in promotional offers in the first round.To introduce a new model of car by the third round.Human resourcesTo provide staff satisfaction with an average of 3 days of strike by the next year.To increase the wages in 2% each year.Customer satisfactionTo ensure customer satisfaction, by decreasing the number of warranty claims in 2% bythe second year.To provide the options with the highest popularity in the market for each type of car andage group, in each round.Outstanding DebtIt is total amount of Debt which is unpaid and company has to pay which comprises shortterm liabilities, outstanding payables and accrued interests. Further, according to the teamevaluation of round 1 and 2, it can be conclude that the debt of auto mobile company hasincreased by 196.85 million pound. Therefore, the organisation need to identify the loopholes inevery department of the enterprise in order to avoid the uncertainty of losses and increased debt.Further, according to the evaluation of round 3 and 4 it can be concluded that debt willcontinuously increase in both the rounds. Return on Assets
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