Solved by verified expert:You must write a problem to propose a solution for; the following topic. “Adding Snacks & Beverages Vending Machine to all Universities” Write a proposal about “Adding Snacks & Beverages Vending Machine to all Universities” You can talk about it and how it can help the students to get their Snacks in easy way in all Universities sections. I have uploaded an example attachment how the writing should be with file name “example” *** Word Count: 1500 words *** In-Text Citations and References using Harvard style
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We propose a cost-effective solution for what has become a growing problem at our stores: the
lack of an accurate, easy-to-use inventory tracking system. We propose that you approve the
purchase and installation, within the next month, of the Inventech software program as well as
the necessary computer hardware to make the system operable. Our company will thereby
benefit from an up-to-date inventory system that will better serve our customers and help us
regain lost revenue because of inadequate inventory procedures.
The Problem with Current Inventory Systems
Since we expanded last year from just our Waveland store to two additional locations, our
inventory ordering methods have not accurately reflected customer demand. Up until now, we
have relied on our experienced employees to gauge ordering needs, but because of our recent
expansion, the sales force we had last year at our sole Waveland store (10 full- and 3 part-time
employees) is now divided among all three Challenger stores. To staff all our locations, we
added 15 part-time employees, most of whom are new to the retail sporting goods business.
Consequently, our sales force is less experienced in predicting and maintaining adequate
The problem of effectively tracking and ordering adequate inventory was compounded by
assuming that the two new stores would mirror the purchasing decisions of customers at the
Waveland site. Instead, our records show that customer demands differ greatly from store to
store, and often by a disturbingly large amount. For example: The Addison store sells far more
football-related jerseys and gear than Waveland does, while Turnersville sells far more fishingrelated items than either the Waveland or Addison stores do. As a result of being stocked exactly
as like Waveland, the Addison and Turnersville locations fell short of meeting customer demand
during key selling seasons. Moreover, even when employees referred customers to one of our
other two stores, we often lost business to competitors. Research shows that when consumers.
have a negative buying experience the first time they try a new business, more than half of them
will not give this business “a second chance to make a first impression” (Maynard et al., 2011).*
But having too much inventory is as unprofitable as stocking too little. A surplus of merchandise
takes up costly warehouse and showroom space, while stocking too few items can drive our
customers elsewhere. But whatever the case, we are losing business and revenue because of
the dated and inefficient ways we purchase and stock merchandise. The table below, based on a
detailed internal audit (made on September 16th in preparation for the 2013 tax year), breaks
down the losses we have incurred since January 2013 due to overstocking in all three stores.
Revenue Loss from Discounting represents the loss we actually experienced when we sold these
items at a deep and necessary discount as opposed to their full retail prices. Revenue Loss from
Unsold Inventory documents the revenue forfeited when the inventoried items did not sell at all:
Revenue Loss from
Revenue Loss from
Lost revenue comes from discounting plus unsold inventory. Our total losses amount to 12.6% of
our expected revenue from all these items, or $125,485 across the three stores. In our
metropolitan sales area, competing sporting goods stores lost only 6.6% of expected revenue, as
opposed to our 12.6%, because of unsold inventory or deep discounting. Our inventory problems
surfaced when we opened the two new stores.
The explanation for such losses is our not having a comprehensive inventory tracking system.
This not only hurts Challenger’s prestige in the marketplace; it will cumulatively mean greater
losses this coming fiscal year. Deep discounting undermines our marketing strategy of being a
premiere sporting goods store that gives customers a one-stop-shopping experience. It also
jeopardizes our long-term goal to expand our customer base effectively through the two new
stores in Addison and Turnersville.
A Solution to the Problem
Purchasing and installing a comprehensive inventory tracking system will allow Challenger to
reclaim a sizable percentage of the revenue we have lost by upgrading our inventory procedures
and considerably reducing discounting and carrying unsold inventory. A relevant study of small
businesses by Lapka and Harper (2012) found that when businesses began using a tracking
system, they were able to reclaim almost 33% of revenue losses due to inventory issues in the
first year. We believe that by switching to an updated, comprehensive inventory tracking system
our company will benefit in several ways:
Based on the study above (Lapka and Harper, 2012), we could conservatively reclaim
28% of the revenue lost this year due to our inventory problems
We could make maximum use of display room and warehouse space.
Eliminating a large percentage of surplus stock, we would reduce a lower profit margin
from discount sales.
We would provide better possibilities for each store to specialize based on
We would be better positioned to expand and maintain our customer base at all three
Feasibility of Installing New Inventory Tracking Software
We researched several tracking software programs and believe that Inventech Inventory
Tracking (www.inventech.com/inventory) offers the best and most cost-effective software for
Challenger’s inventory problems. Inventech will allow us to track, record, and calculate our
merchandise efficiently and be in a better position to project orders in fiscal year 2014. A further
benefit is that Inventech is compatible with our existing and outdated Reventrax system (which
only tracks the cash flow/net receipts generated by each register), thus allowing us to retain
historical sales data and to perform many inventory audits that we are currently unable to
perform such as:
Track inventory for each item from each store at the end of every business day.
Project required inventory levels for the next 7 days based on historical sales data and
current inventory levels.
Automatically place orders for items that we are low on with suppliers who can promise
delivery with only a 2-day lead.
Generate daily recommended transfers of items from high-inventory locations to lowinventory ones, again based on historical sales data and current inventory levels.
Assist us through customized software to grow and expand as we increase our stores in
Training for all 6 full-time employees can begin as soon as the software is purchased, the
necessary hardware and network upgrades are implemented, and the software installed. Another
benefit of going with Inventech is that they offer on-site, 6-hour training programs at a cost of
$240 per employee; these programs can be scheduled at our convenience with 1 week’s
notice—in plenty of time for holiday shopping. Given Inventech’s solid reputation for training
(which we verified by checking with several of their references), the system can be fully in-place
within the next 30 days.
The costs of implementing our proposal are as follows:
Site license and IT Service Plan for Inventech
$1,047.00 ($349.00 per year per store 3 ×
6-hour training for all full-time staff (6
$1,440.00 ($240 each × 6 employees)
New external hard drives for each store to run
$1,797.00 ($599 each × 3 stores)
software and keep secure inventory records
Installation of software and increasing the
capacity of the computer network for the
There are other financial advantages in purchasing the new Inventech software. We would also
be able to amortize, for tax purposes, the cost of the installation of the inventory tracking
software ($7,484) over 5 years.
Our annual expenses would, therefore, actually be:
$6,437 ($1,440 for training + 1 $1,797 for hard drives
+ $3,200 for network upgrades)÷ 5 years 5 $1,287.40 = $1,287.40
+$1,047.00 (annual site license) =
$2,334.40 per year
Compared with the $125,485 we lost in revenue last year because of insufficient inventory
procedures, the amount of annual depreciated costs for the new Inventech system is significantly
smaller and well worth our investment. Using the Inventech software will allow us to recoup 28%
of the revenue lost due to inventory problems, which means that purchasing the Inventech
system will also bring in additional revenue of at least $35,136 for 2014.
Purchasing the Inventech software is necessary, feasible, and cost effective for Challenger. By
approving our proposal, the company can realistically expect to generate at least $35,136 in
additional revenue annually and also increase customer satisfaction and patronage at all three
stores. We will be happy to discuss this proposal with you at your convenience, and look forward
to answering any questions. Thank you.
Kolin, P. C. (2013). Successful writing at work (4th ed.). Boston,MA: Cengage Learning
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