Question 1 – P.E.S.T. and S.W.O.T. Analysis.

Required:

Conduct a P.E.S.T. and S.W.O.T.  analysis for your present or previous organisation and prepare a report for the senior management team that includes the following:

1. List, rank and explain three opportunities and three threats to your organisation.
2. List, rank and assess your organisation’s strengths – starting with the greatest strength to the least and explain why they occupy the position you have chosen. At least four strengths must be addressed.
3. List, rank and assess your organisations weaknesses – starting with the greatest weakness to the least and explain why they occupy the position you have chosen. At least four weaknesses must be addressed.
4. Discuss the action required by management to “exploit” the opportunities and “defend” against the threats.
5. Discuss the assumptions you have made in preparing the above analysis.
6. Briefly describe a “dataset” had it been available would be useful in supporting your analysis.

Question 2 – Cost-Benefit Analysis Exercise

Motorway by-pass

The Smart Transport Company (STC) specializes in providing all forms of road transport throughout Ireland.  Anita Smith is the General Manager of STC, and the company has a fleet of vehicles ranging from articulated trucks to small vans. Its most profitable route is the Dublin to Cork – every day, STC trucks and vans travel this busy road. Recently, a well-known traffic black spot – the large town of Gatestown was by-passed by a 35 km dual-carriageway that is designed to reduce the Dublin to Cork trip by up to 30 minutes during peak times, and by at least 12 minutes during off-peak times. The by-pass is 5km longer than going through Gatestown. Anita knows that her drivers have been looking forward to this new by-pass for several years. However, controversially – the new by-pass is tolled and some drivers are suggesting that it would be cheaper to go through the town than to pay the toll. Many transport companies, including STC, are complaining about the high tolls – especially for trucks. The tolls on the Gatestown by-pass are as follows:

18 wheeled trucks	€14.50
6 wheeled trucks	€10.50
Large van	€9.00
Small van/car	€3.25

Anita is not sure if she should tell drivers to use the by-pass and save a lot of time, or to continue to go through Gatestown as before though it will take longer. She wonders which option is best as STC is particularly vulnerable to fuel costs. She is also curious to know if all STC vehicles should use the by-pass or only some. Finally, she also wants to be able to compare options over the next two years.

You have been engaged to carry out a Cost-Benefit Analysis to help Anita decide what advice she should give the drivers. Assume the following points:

• All vehicles in the company’s fleet have diesel engines except cars
• Diesel is priced at 135.9 cent per litre
• Petrol is priced at 146.9 cent per litre
• All fuel will rise by 10% at the end of year 1
• Tolls will increase by 10% at the end of year 1
• National statistics indicate that accident rates on by-passes are 50% lower when compared to the older roads
• The number and frequency of STC vehicles using the Dublin to Cork road on an annual basis is as follows:

Vehicle Type	Number Using Road	Frequency (return trips)
18 wheeled trucks	4	One per week
6 wheeled trucks	5	Three per week
Large vans	15	Three per week
Small vans	10	Twelve per week
Cars	5	Six per week

For each vehicle type, calculate the costs and benefits of going through Gatestown, and the costs and benefits of using the tolled by-pass. Once you have done this, consider the following questions:

1. What would you recommend to Anita for each type of vehicle, i.e. should the drivers use the by-pass or go through the town?
2. Include figures to your calculations for the benefits of using the by-pass such as:
   1. Reduced driver stress
   2. Less wear and tear on vehicles
   3. Reduced accident rate
   4. Less impact on the environment (e.g. reduced carbon emissions)?
3. What other intangible costs and benefits should you consider when reporting back to J?
4. Carry out some preliminary research of the suitability of Electric Vehicles for a transportation company such as this and include a brief note in your recommendations,

Question 3 – Value Chain Analysis and Activity Mapping

Required:

Describe and examine your organization’s Value Chain and Activity Map. Your answer should include a discussion on the following:

1. Partners
2. Suppliers
3. Business Critical activities
4. Core Competencies
5. Capabilities

Question 4 – Pareto Analysis Exercise – Warehouse Inventory Control

Deirdre Archer is a warehouse manager in a large DIY store. She has just completed a stock take of all inventories in the store and warehouse. She has long suspected that some items are over-stocked and others are under-stocked and wants to know if there is a better way to manage the warehouse inventory.

Recently, she heard about the Pareto Principle that states “20% of your inventory takes up 80% of your warehouse space” and wondered if this applied to the DIY store warehouse. She was also worried about whether she is correctly forecasting stock levels to meet demand on a yearly basis and wanted to know if the agreed re-order quantities from suppliers were adequate to meet demand and to ensure that no over-stocking was taking place due to larger than necessary re-order quantities. In particular, she wanted to concentrate on the Hand Tools Department as the stocktake showed that some items had high levels of stock, while others had very low levels.

Clearly, some items will be more important to the DIY store than others. This is because some items will sell better than others, so that if there are no or very few best-selling items in stock – many customers will be disappointed. Such items have a high value. On the other hand, low-value items might be those that have a high inventory level but do not sell very well. The concept of “usage value” (the number of sales multiplied by price) is often used as a way of discriminating between different stock items. Inventory for those items with a high usage value should be controlled carefully, while items with a low usage value need not be controlled as closely. Table 2.  shows a selected range of hand tools sold in the DIY store. Also provided are the price, annual sales, inventory, and re-order quantity of each tool. In order to be able to draw a Pareto chart you will first have to complete the following:

1. Calculate the usage value for each item
2. Rank each item in descending order according to usage value
3. Calculate the cumulative usage value
4. Calculate the percentage cumulative usage value

Once you have done this, draw a Pareto chart to represent these data. The left side of the chart should show the usage value. The right side of the chart should show the percentage of cumulative value. Finally, the bottom of the chart will display the names (or part numbers) of each item.

Once you have completed the Pareto chart, answer the following questions:

1. Does the Pareto principle apply to usage value in this case?
2. Which items would you recommend to Deirdre that she concentrates her efforts at controlling the stock level most closely?
3. What items would you recommend to Deirdre that do not need close control?
4. How could Deirdre forecast the correct levels of stock for each item?
5. What changes in re-order quantities would you recommend as a result of your analysis?
6. What minimum level of stock would you recommend be maintained at all times for items with high usage value?
7. What other stakeholders should be consulted.

Part number	Description	Unit Price	Annual sales	Inventory 30/1/2016	Re-order quantity
BHZ155	Medium Phillips Screwdriver	€1.69	780	10	50
UYT764	Slotted Screwdriver	€1.49	1030	60	50
ERM835	Hammer	€9.99	1980	360	250
LKW331	Vice-Grip	€15.99	1750	150	20
PWU792	Pliers	€14.99	2050	40	5
BVT657	Large Snips	€11.99	580	220	25
SWP234	Flat File	€3.99	140	800	250
PWA399	Smoothing Plane	€24.99	80	10	10
POU889	Chisel	€5.69	320	15	10
BQH129	Hand Saw	€9.99	210	80	5
BNM711	Utility Knife	€3.49	885	60	50
PLM908	Hacksaw	€9.99	320	220	20
UIL019	Laser Spirit Level	€10.99	100	170	50
UWN682	Adjustable Wrench 250mm	€9.49	160	120	100
WEJ778	Tape Measure	€9.99	2250	155	300
HEG601	14mm Spanner	€4.99	80	25	80
SAU791	G Clamp	€5.99	90	9	10
XZQ770	Trowel	€7.99	200	186	60
VMN482	Jigsaw Blade set	€1.09	300	30	50
HXY650	Nail Claw	€7.99	100	98	20
OIP889	Combined Wire Stripper	€14.99	560	120	10
RTW254	Hex Key Set	€9.49	140	231	75
BTY667	Power Saw	€19.99	59	55	25
WPL990	Nail Punch	€2.99	23	98	25
MBY327	Small Brick Cutter	€10.99	60	21	5

Table 2.   DIY Warehouse Inventory Analysis.