Calculation of maximum gross revenue of the business operating continuously 3 Task 1 3 1.1 Calculation of maximum gross revenue of the business operating continuously 3 Task 2 6 2.1 Calculation of max

Strategic and Operations Management

Table of Contents
Introduction................................................................................................................................3
Task 1.........................................................................................................................................3
1.1 Calculation of maximum gross revenue of the business operating continuously............3
1.2 Calculation of maximum gross revenue of the business operating with breaks and lower
efficiency................................................................................................................................4
Task 2.........................................................................................................................................6
2.1 Calculation of gross revenue assuming full capacity.......................................................6
2.2 Calculation of gross revenue considering employee breaks............................................7
2.3 Calculation of gross revenue considering employee breaks and lower efficiency..........7
Task 3.........................................................................................................................................8
Conclusion..................................................................................................................................9
List of Tables
Table 1: Calculation of maximum gross revenue of the business operating continuously........4
Table 2: Calculation of maximum gross revenue of the business operating with breaks and
lower efficiency..........................................................................................................................6
Table 3: Calculation of gross revenue assuming full capacity...................................................6
Table 4: Calculation of gross revenue considering employee breaks........................................7
Table 5: Calculation of gross revenue considering employee breaks and lower efficiency......8

Introduction
The modern business situations require from managers to make quick estimates using
numeracy skills. This assignment focuses on the application of fermi techniques to business.
Various problems of different supply chain have been discussed using several choices to
maximise revenue and profits. Task 1 discusses car was business situation by simplifying the
solution. Task 2 explains the systematic approach to gross revenue at different situations.
Finally, Task 3 analyses the available choices to provide quantitative justification for decision
making.
Task 1
1.1 Calculation of maximum gross revenue of the business operating continuously
Given that,
Total period in observation = 48 hours
Also, it is given that washing bays take 20 minutes and charges $40 per wash whereas,
vacuuming bays take 10 minutes per car and charges $10 per vacuum.
Since there are four washing bays,
The total output of washing process = 4 cars per 20 minutes or 12 cars per hour
Similarly, as there are two vacuuming bays,
The total output of vacuuming process = 2 cars per 10 minutes or 12 cars per hour
It can be observed here that hourly processing time for both the operation is same. Therefore,
idle time is zero. It means that the per hour productivity of the car wash business is 12 cars.
Now,
Total productivity during the observation period = operational time X hourly productivity
= 48 hours X 12 cars = 576 cars
Total revenue from car wash = total cars washed during the observation period X washing
charge per wash
= 576 cars X $40 = $23,040