BSBINM601 Manage Knowledge and Information Assessment 2

Appendix 1

CoffeeVille – your brief

Rufus and Emma Belcastran, CoffeeVille’s owners, have approached you for assistance. The business has been profitable and steadily expanding for the last 4 years but recently, expenses have started to climb and sales drop. In the last 3 months they have started to address the issue of rising expenses.

In the last 3 months they have started to address the issue of rising expenses by evaluating and updating procedures and work practices in an effort to reduce costs. So far, their efforts have not had a significant impact on expenditure and their sales revenue continues to be below budget forecasts.

It’s January 2016 and all four stores are closed for a summer break. Emma and Rufus are using the down time to assess their business’s operational and financial status in preparation for the year ahead.

They have asked you to help them analyse their business and the external environment to identify potential reasons for their declining sales. Now that the business issue or problem has been identified, they want you to analyse data and information to determine the potential causes of the issue.

You plan to use data and information identified in Assessment 1 and in the Appendices of Assessments 1 and 2, as well as conduct research into potential external environmental factors. You believe using statistical and sensitivity analysis techniques will enable you to identify relationships between data, clarifying potential causes of the business issue.

Appendix 2

Coffeeville business data and information

Business performance

General trends

● Sales for first 6 months of 2015 are down across all categories and stores. Overall, food sales are down 10%, beverages 12% and catering 17%. When combined with rising expenses, profits are down for the first half of the financial year by 19%

● After opening a year ago, the 4th store is slowly building customers but is still not performing to forecasted levels. Most of the marketing budget and Emma’s efforts have been focussed there.

● Productivity has increased with staff able to serve more customers per hour per person. Barista coffee preparation speeds have increased after all barista staff completed an advanced barista course in Jan 2015.

● Savings made in payroll and cost of goods due to productivity gains has been offset by rising wages and food prices.

Payroll expenses

Year

Payroll expenses as % of total expenses

2009

34.9%

2010

35.3%

2011

34.2%

2013

39.8%

2014

42.1%

2015

45.3%

Financial information – Organisation

Financial year July 2014–June 2015

July–December 2014

Sales $

July

Aug

Sept

Oct

Nov

Dec

Food sales

285,668

279,805

273,942

262,580

250,078

199,251

Beverage sales

191,199

190,163

189,126

187,054

182,650

179,523

External catering

82,360

83,540

81,980

81,480

77,500

74,370

Total income

559,227

553,508

545,048

531,114

510,228

453,144

Total expenses

482,190

470,934

483,431

451,683

461,746

404,986

Net profit/loss

77,037

82,574

61,617

79,431

48,482

48,158

Jan–July 2015

Sales $

Jan

Feb

Mar

April

May

June

Year Total

Food sales

203,894

221,209

238,525

245,476

259,742

262,803

2,982,972

Beverage sales

181,220

185,263

187,263

188,263

189,560

191,208

2,242,492

External catering

57,284

60,926

67,853

68,853

51,853

49,137

837,136

Total income

442,398

467,398

493,641

502,592

501,155

503,148

6,062,600

Total expenses

413,064

421,865

442,733

447,512

464,198

478,630

5,422,972

Net profit/loss

29,334

45,533

50,908

55,080

36,957

24,518

639,628

Financial year July 2015–June 2016

July–December 2015 (actual results)

Sales $

July

Aug

Sept

Oct

Nov

Dec

Food sales

231,391

226,642

231,865

227,105

202,563

154,300

Beverage sales

148,065

147,262

153,192

158,323

135,088

129,705

External catering

60,207

60,358

56,476

55,457

52,111

47,597

Total income

439,663

434,262

441,533

440,885

389,762

331,602

Total expenses

373,713

364,780

366,472

374,752

339,093

288,494

Net profit/loss

65,950

69,482

75,061

66,133

50,669

43,108

Jan–July 2016 (adjusted forecast)

Sales $

Jan

Feb

Mar

April

May

June

Year Total

Food sales

177,388

201,300

224,214

208,655

233,768

233,632

2,552,823

Beverage sales

152,225

163,031

161,046

167,554

170,604

170,175

1,856,270

External catering

46,973

51,178

56,318

57,148

42,779

40,292

626,894

Total income

376,586

415,509

441,578

433,357

447,151

444,099

5,035,987

Total expenses

351,615

375,031

396,039

385,864

414,176

422,459

4,452,488

Net profit/loss

24,971

40,478

45,539

47,493

32,975

21,640

583,499

Budget variance report – All stores

Summary of variance results for comparisons of budget to actual income for the period 2011 - 2015

A positive variance indicates the percentage above budget, a negative figures indicates the percentage below budget.

Financial year

2011-12

2012-13

2013-14

2014-15

2015-16

Jul-Dec 2011

Jan-Jun 2012

Jul-Dec 2012

Jan-Jun 2013

Jul-Dec 2013

Jan-Jun 2014

Jul-Dec 2014

Jan-Jun 2015

Jul-Dec 2015

Food sales

5%

8%

7%

12%

8%

1%

-3%

-8%

-10%

Beverage sales

8%

2%

4%

5%

5%

-2%

-4%

-5%

-12%

External catering

12%

4%

7%

2%

5%

2%

-8%

-11%

-17%

Total income

8%

5%

6%

6%

6%

1%

-5%

-9%

-12%

Net profit/loss

7%

4%

-1%

6%

6%

-4%

-5%

-11%

-13%

Financial history by income source

*Note: Store 3 opened July 2014, Store 4 July 2014

Food Sales

July

Aug

Sept

Oct

Nov

Dec

Jan

Feb

Mar

April

May

June

Total

2013-14

224,580

212,965

208,695

210,589

209,568

189,655

175,250

186,752

198,765

209,632

218,655

225,892

2,470,998

2014-15

357,580

362,937

365,600

355,290

347,868

337,438

301,056

301,475

323,324

307,358

282,052

289,080

3,931,058

2015-16

257,101

251,825

252,027

244,199

225,070

175,341

177,388

201,300

224,214

208,655

233,768

233,632

2,684,519

Beverage Sales

July

Aug

Sept

Oct

Nov

Dec

Jan

Feb

Mar

April

May

June

Total

2013-14

150,469

140,557

137,739

138,989

138,315

125,172

115,665

123,256

131,185

138,357

148,385

151,348

1,639,437

2014-15

210,306

214,056

215,920

203,934

189,078

182,794

160,878

161,130

182,540

185,239

185,074

189,085

2,280,034

2015-16

168,255

167,343

170,213

172,090

157,079

152,595

152,225

163,031

161,046

167,554

170,604

170,175

1,972,210

External catering

July

Aug

Sept

Oct

Nov

Dec

Jan

Feb

Mar

April

May

June

Total

2013-14

51,650

52,890

54,820

59,850

65,890

60,150

39,550

41,330

42,580

46,450

49,620

51,230

616,010

2014-15

97,274

98,881

99,680

95,853

89,385

85,196

60,585

60,753

66,414

77,605

81,944

80,067

993,637

2015-16

70,418

71,009

68,043

67,221

63,550

59,496

46,973

51,178

56,318

57,148

42,779

40,292

694,425

Total income

July

Aug

Sept

Oct

Nov

Dec

Jan

Feb

Mar

April

May

June

Total

2013-14

426,699

406,412

401,254

409,428

413,773

374,977

330,465

351,338

372,530

394,439

416,660

428,470

4,726,445

2014-15

665,160

675,874

681,200

655,077

626,331

605,428

522,519

523,358

572,278

570,202

549,070

558,232

7,204,729

2015-16

495,774

490,177

490,283

483,510

445,699

387,431

376,585

415,509

441,578

433,357

447,151

444,099

5,351,154

Net profit

July

Aug

Sept

Oct

Nov

Dec

Jan

Feb

Mar

April

May

June

Total

2013-14

93,874

85,347

92,288

98,263

99,306

78,745

62,788

77,294

85,682

94,665

91,665

89,979

1,049,896

2014-15

83,501

108,019

121,333

100,609

77,095

70,695

83,373

61,305

76,724

73,854

72,457

66,266

995,231

2015-16

68,296

73,126

55,426

72,312

42,350

41,174

24,970

40,478

45,539

47,492

32,975

21,641

565,779

Financial information - Store 2

Store 2 Financial results July – December 2014

Sales $

July

Aug

Sept

Oct

Nov

Dec

Food sales

64,364

65,329

65,808

63,952

62,616

60,739

Beverage sales

37,855

38,530

38,866

36,708

34,034

32,903

External catering

17,509

17,799

17,942

17,254

16,089

15,335

Total income

119,728

121,658

122,616

117,914

112,739

108,977

Total expenses

104,164

102,192

106,676

100,227

98,083

95,900

Net profit / loss

15,564

19,466

15,940

17,687

14,656

13,077

Store 2 Financial results Jan – July 2015

Sales $

Jan

Feb

Mar

April

May

June

Year Total

Food sales

54,190

54,266

58,198

55,324

50,769

52,034

707,590

Beverage sales

28,958

29,003

32,857

33,343

33,313

34,035

410,406

External catering

10,905

10,936

11,955

13,969

14,750

14,412

178,855

Total income

94,053

94,204

103,010

102,636

98,833

100,481

1,296,851

Total expenses

79,005

82,900

89,619

89,294

85,984

88,424

1,122,467

Net profit/loss

15,048

11,305

13,391

13,342

12,848

12,057

174,384

Store 2 Financial results July – December 2015

Sales $

July

Aug

Sept

Oct

Nov

Dec

Food sales

$51,289

$50,664

$49,413

$46,912

$46,286

$42,908

Beverage sales

$34,158

$33,827

$29,836

$28,515

$28,183

$26,178

External catering

$10,448

$8,064

$7,872

$7,776

$10,112

$9,363

Total income

$95,895

$92,555

$87,121

$83,203

$84,581

$78,449

Total expenses

$86,655

$82,660

$82,920

$80,392

$82,176

$72,560

Net profit/loss

$9,240

$9,895

$4,201

$2,811

$2,405

$5,889

Store 2 Budget variance report July – December 2015

A positive variance indicates percentage above budget, a negative figures indicates percentage below budget.

Sales $

July

Aug

Sept

Oct

Nov

Dec

Food sales

-2%

-3%

-5%

-9%

-10%

-14%

Beverage sales

3%

2%

-4%

-11%

-12%

-9%

External catering

-12%

-16%

-18%

-19%

-21%

-23%

Total income

-11%

-12%

-8%

-19%

-20%

-17%

Total expenses

1.50%

1.78%

2.10%

1.45%

1.32%

1.70%

Net profit/loss

-31%

-36%

-41%

-86%

-59%

-69%

Financial information - Store 3

Store 3 Financial results July – December 2014

Sales $

July

Aug

Sept

Oct

Nov

Dec

Food sales

71,516

76,217

76,776

78,164

76,531

77,611

Beverage sales

42,061

44,952

45,343

44,865

41,597

42,043

External catering

19,455

20,765

20,933

21,088

19,665

19,595

Total income

133,032

141,934

143,052

144,117

137,793

139,249

Total expenses

115,738

119,224

117,303

122,499

121,258

122,539

Net profit/loss

17,294

22,710

25,749

21,618

16,535

16,710

Store 3 Financial results Jan – July 2015

Sales $

Jan

Feb

Mar

April

May

June

Year Total

Food sales

69,243

72,354

77,598

70,692

64,872

63,598

901,685

Beverage sales

37,002

38,671

43,810

42,605

42,567

39,708

523,870

External catering

13,935

14,581

15,939

17,849

18,847

16,814

227,342

Total income

120,180

125,606

137,347

131,146

126,286

120,120

1,652,897

Total expenses

100,951

110,533

119,492

114,097

109,869

105,705

1,425,544

Net profit/loss

19,229

15,073

17,855

17,049

16,417

14,415

227,353

Store 3 Financial results July – December 2015

Sales $

July

Aug

Sept

Oct

Nov

Dec

Food sales

$71,922

$71,140

$71,922

$70,358

$68,795

$40,657

Beverage sales

$37,309

$36,894

$37,309

$36,065

$35,236

$28,407

External catering

$10,560

$9,440

$9,080

$10,320

$11,920

$12,768

Total income

$119,791

$117,474

$118,311

$116,743

$115,951

$81,832

Total expenses

$108,959

$103,853

$103,752

$103,752

$105,927

$87,464

Net profit/loss

$10,832

$13,621

$14,559

$12,991

$10,024

-$5,632

Store 3 Budget variance report July – December 2015

A positive variance indicates percentage above budget, a negative figures indicates percentage below budget.

Sales $

July

Aug

Sept

Oct

Nov

Dec

Food sales

-8%

-9%

-8%

-10%

-12%

-15%

Beverage sales

-10%

-11%

-10%

-13%

-15%

-17%

External catering

-12%

-13%

-16%

-14%

-13%

-16%

Total income

-16%

-18%

-18%

-19%

-21%

-23%

Total expenses

2.10%

2.30%

2.20%

2.20%

2%

2.30%

Net profit/loss

-43%

-45%

-46%

-51%

-56%

-59%

Appendix 3

Research data and information

Melbourne demographics – City of Melbourne

General and industry specific information is available on City of Melbourne website.

Two main areas of the website to investigate are:

● City of Melbourne, ‘Doing business in Melbourne’, viewed January 2016, < http://www.melbourne.vic.gov.au/business/doing-business/Pages/doing-business-in-melbourne.aspx >

● City of Melbourne, ‘Research and statistics’, viewed January 2016, < http://www.melbourne.vic.gov.au/about-melbourne/research-and-statistics/Pages/research-and-statistics.aspx >.

City of Melbourne has been producing a report called Daily Population Estimates and Forecasts for many years. It was updated in 2015. Among other information, it includes statistics on past and future trends for City of Melbourne’s workforce and residential population.

You can find it at:

● City of Melbourne, ‘Daily population estimates and forecasts’, viewed January 2016, < http://www.melbourne.vic.gov.au/about-melbourne/research-and-statistics/Pages/daily-population-estimates-and-forecasts.aspx >.

Economic activity

Summary Australian interest rates – Reserve Bank of Australia

All rates expressed as percentages.

Feb

Mar

Apr

May

June

Jul

Aug

Sept

Oct

Nov

Dec

2014

2.5

2.5

2.5

2.5

2.5

2.5

2.5

2.5

2.5

2.5

2.5

2015

2.25

2.25

2.0

2.0

2.0

2.0

2.0

2.0

2.0

2.25

2.25

Melbourne CBD retail information

Commercial property rental rates per square meter Melbourne CBD

2013

2014

2015

2016 (forecast)

Gross average rent

$7,000

(h 5.7%)

$7,750

(h 10.1%)

$8,250

(h 6.4%)

$8,800

(h 6.6%)

Commercial property vacancy rates – Melbourne CBD

2013

2014

2015

2016 (forecast)

Vacancy rates

8.2%

8.5%

9.1%

9.5%

Cafe / restaurant / bistros in Melbourne CBD as at June 31st 2015

Note: figures based on registered businesses, closures and permit applications lodged by June1st each year.

Year

No. new cafe / restaurant / bistros opened

No. cafe / restaurant / bistros closed

No. cafe / restaurant / bistro seats

Total café / restaurant / bistros in CBD

2011

37

12

169,983

2585

2012

41

13

178,320

2613

2013

39

18

206,031

2634

2014

52

19

213,272

2670

2015

45

21

217,157

2694

Media articles

Business News Aug 2014

New era looms as CBD office boom ends

Property developers and investors are facing diminished returns and an uncertain future as the CBD commercial property market stalls.

Coinciding with a slowdown of economic activity and low business confidence, particularly in the retail and professional services sector, applications for new development projects fallen to their lowest levels in 5 years.

Mr Kenneth Staines, from Placement Properties, indicated this trend is also occurring in most other capital cities in Australia and many other Western countries. Consumer confidence is down, people are not spending and this is affecting businesses everywhere. Everyone is sitting tight on their money – consumers and investors, he stated at a business forum this week.

One of the reasons he believes applications are down is the recent rise in vacant office space within the central CBD. Rents have remained relatively high and many businesses are struggling as income has not risen in tandem, he said.

A recent survey conducted by the Property Institute shows the number of tenants in the CBD falling, particularly in small to medium business categories. New tenant enquiries has been flat with most enquiries coming from larger businesses interested in acquiring recently vacated adjoining office space.

Melbourne moves: businesses shift out from the city

December 2014

There’s a shift on in Melbourne, with many medium and small businesses moving out of the CBD to its fringes and suburbs.

A new report shows 16 small and 10 medium sized companies moved from the CBD to its fringe and nearby suburbs in the past 12 months, continuing a trend that started in 2013.

The annual Johnson report Melbourne Property 2014 says there are several factors behind the move, including cost savings and changes in the way people are working.

Johnson’s Research Manager Kim Rayner says their analysis shows 85% of these businesses who moved out of the CBD this year have relocated to properties in the periphery or within 5 km of the CBD, with very few locating further than 10 kms.

Johnson’s Director of Office Leasing (Victoria) Andrew Mahji says Melbourne’s CBD office vacancy rate has substantially increased this year.

“We have a vacancy rate of 10% in the Melbourne CBD,” Mahji says. “It coincides with a lot of new buildings going up in Docklands and Richmond.”

Softer demand drives up office vacancy rates in all CBD markets

Vacancy rates for offices is expected to peak in most Australian CBD markets in 2015–2016, with Brisbane expected to have the peak vacancy of nearly 14% according to forecasts from REAC.

REAC’s Research Director for Australia, Millie Kearney, said the latest Property Council of Australia vacancy statistics highlighted that demand had decreased across all CBD markets with negative net absorption driving up vacancy rates in every major capital city.

CBD Office Total Vacancy rate % - July 2015

Appendix 4

Decision Analysis Report

Part 1 – Decision / Issue Name

Name decision, issue, problem, project, plan or strategy the decision is linked to.

Decision required

Describe the decision that must be made. It should outline what are the expectations or parameters of the decision to any decision-makers or recipients of the document. Include any timeframes the decision must be made in.

History

A brief history of events, reasons or causes that necessitates the decision. This should be an overview only and only contain information relevant to the required decision. It should briefly describe the who, what, when and where of the situation requiring a decision.

Part 2 – Analysis

Summarise the analytical processes used, the results of the analysis and their implications – do they support or disprove the issue or problem, what further questions were raised as a result of the analysis.

Analysis

Results

Implications

Part 3 – Decision options

List all viable, genuine courses of action that address the issue. Briefly list actions to be taken, any costs associated with the option and potential positive and negative outcomes.

Option 1:

Positive outcomes / benefits

Negative outcomes / Risks

Option 2:

Positive outcomes / benefits

Negative outcomes / Risks

Option 3:

Positive outcomes / benefits

Negative outcomes / Risks

Part 4 – Recommendation / Action taken

Indicate which course of action is recommended (if making a recommendation to a higher decision-maker) or the action to be taken. Briefly outline the reasoning for choosing this option.

Confirmation / Approval

Names, titles, signatures and date of decision or granting of approval

Name Title Signature Date

Name Title Signature Date

Name Title Signature Date

Appendix 5

Assessment questions

1. What is your objective/s for the analysis processes you plan to undertake?

2. Briefly describe how management information or decision support systems can assist you when analysing information and identifying trends and patterns.

3. Briefly describe how management information or decision support systems can support the analysis of proposed courses of action and their impact on the business.

4. List two types of adjustments you might have to make management information or decision support systems to help you meet your stated objectives.

Want a fresh copy of this sample assignment