Strategic Management Tasks 2022

Strategic Management
Task 1
1.Calculating the maximum gross revenue for the business of the car wash assuming all
the bays are operating continuously for a 48 hour period:
Total number of bays= 6
Length of the operations period: 48 hours or 4 working days of 8 hours each.
Washing: takes 20 minutes @ $40 per wash
Vacuum cleaning: takes 10 minutes @ $10 per cleaning.
Washing
Working hours per day= 8 which is equivalent to 8x60 =480 minutes
The maximum number of cars to be washed per day= 480 minutes divided by 20 minutes
(480/20) =24 cars washed per day. For the 48 hour period or four days, 24x4= 96 cars
washed
Gross revenue for the washings: 96x$40= $3840
Vacuum cleaning:
Working hours per day= 8 which is equivalent to 8x60 =480 minutes
The maximum number of cars to be washed per day= 480 minutes divided by 10 minutes
(480/10)=48 cars vacuum cleaned per day. For the 48 hour period or four days, 48x4=
192 cars cleaned.
Gross revenue for vacuum cleaning: 192x$10= $1,920
Total gross revenue for the Car Wash: $3,840
$1,920
Total gross revenue, 48 hours $5,760
2. Calculating the maximum gross revenue of the business operating with employee
breaks included and all bays active only 75% of the 48 hour period.
(It is assumed that employee breaks will not affect operations because they go in turns at
different periods)
Maximum gross revenue: 75% x 5,760= $4,320.

Task 2
Calculating the maximum gross revenue for the kebab van in every 98 hour period.
The number of kebabs produced in the 98 hour/5880 minute period: 5880 minutes
divided by 5 multiplied by 6 (5880/5x6) = 7056 kebabs. Assuming that all the kebabs are
sold, the gross revenue is 7056x $10= $70,560.
Calculating the maximum gross revenue for the kebab van in every 98 hour period
inclusive of employee breaks: During the 98 hour period, there are 11-hour breaks. If for
98 hours gross revenue is $ 70,560 what about in 87 hours (98 less 11)? It is
$70,560/98= 720x87= $62,640.
If the business operates at an efficiency of 75% including employee breaks, the gross
profit will be$62,640x75%= $46,980
Competitor’s Business
Calculating the gross revenue of the coffee shop in 48 hours, assuming that it serves 16
people per hour: 48x16=768 x $4.50= $ 3,456.
Cost of production: 768x$.30= 230.40
Net profit= Gross revenue less cost of production= $ 3,456 less 230.40= $3,225.60
Task 3
INTRODUCTION
Entrepreneurs are often challenged between choosing to start a business from scratch and buying
one which is in existence. The following discussion makes a case for or against purchasing the
coffee business based on the gross revenue. It takes into consideration all the factors that might
influence decision making in this matter.
The case examines the pros and cons of buying an existing business and also of starting a fresh
one. It concludes by makes a recommendation as to which is the best choice to make under the
circumstances.