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Brant Freezer

The warehouse in St. Louis showed the most improvement in performance when comparing the first five months of 2010 to 2009. The cost per unit shipped in St. Louis reduced from $9.97 in 2009 to $9.07 in 2010. The warehouse in Fargo showed the poorest change in performance between 2010 and 2009. The costs per unit increased 31% from 2009 to 2010 for the Fargo warehouse. J.Q. should recommend dropping the warehouse in Denver. Denver had the lowest volume and highest unit costs among all the public warehouses used.

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172 views

Brant Freezer

The warehouse in St. Louis showed the most improvement in performance when comparing the first five months of 2010 to 2009. The cost per unit shipped in St. Louis reduced from $9.97 in 2009 to $9.07 in 2010. The warehouse in Fargo showed the poorest change in performance between 2010 and 2009. The costs per unit increased 31% from 2009 to 2010 for the Fargo warehouse. J.Q. should recommend dropping the warehouse in Denver. Denver had the lowest volume and highest unit costs among all the public warehouses used.

Uploaded by

Wadzanai Mutero
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Question 1

When comparing performance during the first five months of 2010 with performance in 2009, which
warehouse shows the most improvement? Answer

After calculated all of the warehouse costs per unit of every city in 2009 and 2010 which showed on
EXHIBIT 3-A and compared them, we found that St. Louis is the only one that shows any
improvement, using cost per unit shipped as the performance criterion. The cost for the first five
months of 2009 was $9.97, which reduced to $9.07 for the first five months of 2010.

Question 2

When comparing performance during the first five months of 2010 with performance in 2009, which
warehouse shows the poorest change in performance? Answer

After calculated all of the warehouse costs per unit of every city in 2009 and 2010 which showed on
EXHIBIT 3-A and compared them, we found that the poorest change in performance is the
warehouse in Fargo, which is the location of Brant Freezer Company. The costs per unit of Fargo’s
warehouse increased 31% from 2009 to 2010.

Question 4

J.Q. is aggressive and is going to recommend that his father cancel the contract with one of the
warehouses and give that business to a competing warehouse in the same city. J.Q. feels that when
word of this gets around, the other warehouses they use will “shape up.” Which of the seven should
J.Q. recommend be dropped? Why? Answer

J.Q. should recommend to drop the warehouse in Denver. Denver has the lowest volume and
highest unit costs among all the public warehouses used. J.Q. should make a detailed investigation
about the situation and productivity of other warehouses in Denver area before deciding to drop
current warehouse there.

Question 7

Use the 2009 income statement and balance sheet to complete a Strategic Profit Model For J.Q.
Answer

Question 8

Holding all other information constant, what would be the effect on ROA for 2010 if warehousing
costs declined 10 percent from 2009 levels? Answer Warehousing cost in 2010 is 90%of that cost in
2009, which is $662,384. Thus, the ROA of 2010 will be 18.926%, which is 16.796% in 2009. ROA
increase 2.13% from 2009 to 2010

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