Strategic Management: Quantitative Literacy Case Study Analysis

This case study analyzes a business scenario involving a car wash, kebab van, and coffee shop to demonstrate quantitative literacy in strategic management. The assignment requires calculating and interpreting financial data, including gross profit for each business unit, considering factors like operating hours, employee breaks, and customer behavior. The analysis includes creating tables and charts to present the data and providing written explanations of the calculations and their implications. The study assesses the impact of competitive factors, such as a coffee shop adjacent to the car wash, on the overall business performance. The solution calculates the gross profit for the car wash, kebab van, and coffee shop, based on given operational details, and provides a comprehensive understanding of the business's financial performance.

Running head: STRATEGIC MANAGEMENT
Strategic Management

STRATEGIC MANAGEMENT
Table of Contents
An Introduction and Background to the Synthetic Study..........................................................3
Interpretation..............................................................................................................................4
Facts and Tables.........................................................................................................................4
Written Interpretation and Explanation......................................................................................6
Conclusion..................................................................................................................................7
References..................................................................................................................................8
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An Introduction and Background to the Synthetic Study
Quantitative analysis is defined as the procedure of gathering and determining the provable
data. This analysis helps in understanding the actions and overall performance of the
business. The main focus of the quantitative analysis is to provide a hypothetical condition or
situation with numerical values. Moreover, the quantitative analysis helps in evaluating the
financial statements of the company (CFI Education Inc, 2019). In the case study, there is an
owner who possesses two businesses. However, there is a third business as well, which has
been operating in the local competition. The first business of the owner has been stated as a
Valet car washing outlet, which is located in the shopping centre. It operates with four hand
washing bays and two vacuuming bays. The car wash procedure is found to be operating for
8 hours a day and for 6 days. In addition, there are 12 employees who are working there.
Every employee is entitled to a 1-hour break in the 8 hours period. The employees are
divided equally across the bays.
The price of the car wash is $40 and $10 per vacuum. The washing time of the car is 20
minutes and the vacuuming time is 10 minutes. On the other hand, kebab van is found to be
operating as one of the businesses for the owner. It is adjacent to the car wash service. This
van is generally active from 12 noon to 2 am and is operates 7 days a week. There are mainly
four employees who are working. They are rotated out every 8 hour time period. Moreover,
they are entitled to the 1-hour break. Most importantly, the production time of kebab is near
about 5 minutes. It was mentioned that 6 kebabs can be generated concurrently. However,
there is a competitor having a coffee shop adjacent to the car wash and kebab van. The
seating capacity of the coffee shop is 16 and it has been operating for the 48 hours period
similar to the car wash service. This coffee shop generally serves the customers of the car
wash service. The price of the coffee is $4.50 and it also has a production cost of 30 cents.
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Moreover, there is a barista and a waiter in the coffee shop who works for 8 hours a day. In
addition, 1-hour break has been given to the employees in 8-hour shift.
Interpretation
In the given case study, quantitative literacy plays a significant role. It generally deals with
the research methods which are mainly used for gathering and manipulating the data.
Moreover, it enables an individual to create a sense regarding the charts, graphs and tables. It
is mainly defined as the ability for using the mathematical tools in terms of evaluation which
have been arising in the work lives. The main aim of quantitative literacy is to enhance the
student’s skill of mastery despite the fact that, there exists a certain gap in the statement of
standards. In relation to the study, quantitative literacy is considered as part of the aim, which
mainly increases the assessment activities. In the case of task 1, gross profit has been
calculated based on the activities of the car wash, which are conducted in the first business.
Moreover, gross profit of 75% has also been calculated in the paper. On the other hand, in
case of task 2 gross profits have been calculated with breaks of the employees, which are
based on the particular activities of the Kebab Van. In this case, the gross profit of without
break for the employees has also been calculated. Moreover, task 3 is based on the
competitive analysis of the coffee shop, which is just adjacent to the car wash shop and kebab
van. In this task, the gross profit has been calculated with respect to the activities of the
coffee shop. The customers of the coffee shop generally comprise the customers of the car
wash service (Michigan State University Board of Trustees, n.d).
Facts and Tables
The facts and table of task 1, task 2 and task 3 have been listed below.
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Operating Hours 8
Operating Mins 480
Operating Days (Per week) 6
Cash Wash Price 40.00$
Car Vaccum Price 10.00$
Total Car Washing Price 50.00$
Car Wash Timing (Minutes) 20
Car Vaccum (Minutes) 10
Total Time For Caar Wash 30
Per Day Car Wash 16
Total Car Wash in a week 96
Gross Profit 4,800.00$
Gross Profit (75%) 3,600.00$
Task 1
Task 1: Gross Profit for Car Wash Service
Active Hours 14
Working Hours 13
Break Hour 1
Total Break Hour 7
Production Time 5
Total Productuion In 1 hour 12
Total Production In A Day With Empoyee Breaks 156
Total Production In A Day 168
Total Production In Week With Breaks 1092
Total Production In Week 1176
Price 10.00$
Gross Revenue (With Breaks) 10,920.00$
Gross Revenue 11,760.00$
Gross Revenue at 75% 8,820.00$
Task 2
Task 2: Gross profit Of Kebab Van
Capacity 16
Operating Hours 48
Total Car Wash 96
Coffee Shop Customers (60%) 58
Coffee Charge 4.50$
Breaking Hours 1
Per day Customer 4
Gross Profit 259.20$
Task 3
Task 3: Gross Profit of the Coffee Shop
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Written Interpretation and Explanation
In task 1, the main question was about calculating the gross profit when all the bays were
working continuously for the time period of 48 hours. In addition, there is a question, which
depicts the manner, in which the gross profit can be calculated with only 75% of the bays
active for the 48-hour time period. Here the operating hours are 8 for the employees, which is
equal to 480 minutes. There is 6 days’ work in a week. The car price and the car vacuum
price are $40 and $10 respectively. Similarly, the car washing time and car vacuuming time
are recorded as 20 minutes and 10 minutes simultaneously. The number of per day washing
car can be calculated as 480/30= 16. So, the total number of cars washed is 16*6=96. Thus
the gross profit will be 96*50= $4800. In addition, if the bays are active by 75% then the
maximum gross profit will be 4800*75%= $3600.
In task 2, the total active hours of the kebab van is 14 hours and the working hours are 13. In
this 14 hour, there is a 1-hour break. The production time of the van is 5 minutes. Thus, total
production in 1 hour can be calculated as 60/5=12. Total production in the day with
employee’s breaks can be determined as 13*12= 156. Then the total production in the week
will be 156*7= 1092 unit. Furthermore, total production can be calculated as 14*12= 168
units. Total production in the week will thus be 168*7=1176 units. Gross revenue with breaks
will be 1092*10= $10920 and Gross revenue without break will amount to 1176*10=
$11760.
In the case of task 3, it can be found to be mainly dealing with the coffee shop. The capacity
of the coffee shop is 16 with the operating hours being 48. It was thus calculated earlier that
total car wash in a week was 96. It was also stated in the problem that 60% of the customers
of car wash service were the customers of the coffee shop i.e. 96*60%= 58 with the charge
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for each unit being $4.50. Per day customer can further be calculated as 58/16=4, with the
gross profit being $259.20.
Conclusion
It can further be concluded that the car wash service and the kebab van has generated a good
amount of gross revenue. Moreover, the coffee shop has generated a good amount of sales,
thereby making a profit to sustain in the market.
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References
CFI Education Inc 2019, What is Quantitative Analysis? CFI, viewed 20th September 2019,
<https://corporatefinanceinstitute.com/resources/knowledge/finance/quantitative-analysis/>
Michigan State University Board of Trustees n.d, Quantitative Literacy: Quantitative
Literacy, What is Quantitative Literacy?, <https://libguides.lib.msu.edu/qlit>
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