IFSM 300 Final
Assessment Exam
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signature below, I confirm that the work contained here is my own, I have
received no outside assistance and have properly cited and referenced any
external research that has been incorporated in my answers. I have fully complied with UMUC's Policy on
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__Keith M Newell___________________________________
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Instructions:
Use the Case Study presented here to answer the questions
below. Your answers should be long
enough to answer each question fully and completely. Quality vs. quantity counts – be
specific enough to address the questions but do not include lengthy paragraphs. Each question can be answered in no more than
3 paragraphs. Your answers should
demonstrate an understanding of the concept(s), should apply critical thinking,
and should provide analysis of the Case Study in light of the concepts(s). You should not just re-iterate what has been
presented in class but integrate the information and relate it to the Case
Study. Proper APA style must be used for
any citations and references that you use.
Your Exam will be graded on the completeness and accuracy of your
responses and whether you have appropriately tied your responses to the Case
Study. Responses that do not mention the
Case Study will receive very few points, if any. Each question is worth 10 points.
Download this file to your
computer and save – be sure to insert your last name into the filename. Place your answers within this document
directly below each question.
OLD DOMINION TRAIL BIKES
Case Study
In 1985 Ted Thomas took $6,000 of his savings, borrowed another
$4,000 from his best friend, and opened a bike rental business in Vienna, VA,
adjacent to the Washington & Old Dominion Trail (W&OD) that goes from
Purcellville to Old Town Alexandria (45 Miles) and connects to the Mt Vernon
Trail (18 Miles) and ends at George Washington’s Mt Vernon Estate. He rented a location, bought 10 bikes and
opened his first store in Vienna near an entrance to the W&OD Trail, where
there is also parking, and near the historic Vienna Inn and a number of food
and drink establishments. He has since
opened stores in Old Town Alexandria and Reston, VA, where he sells, rents and
repairs bicycles. The Vienna store is
now his anchor store, and at 5,000 square feet, it is three to five times
larger than his other stores. Ted
estimates he sells around 3,000 new bikes a year. Because of the high use of
the W&OD trail, especially on weekends, he also provides tune up and
maintenance services at all of his stores for the many riders from up and down
the trail.
In 2012, Ted leased a store in the heart of D.C., near the
Smithsonian Museums and other tourist attractions. He uses this store to rent bikes to tourists
and residents of the city and does some repairs to his rental bicycle inventory
in the back of the shop.
Although he has always made money, or he would not be in business,
Ted has seen a decline in bikes sales of about 20 percent since 2008. He attributes this to the downturn in the
economy and the growth in Internet sales.
However, his rental, tune up, and repair business has increased
dramatically. Over the past few years,
he realized that he must be more aware of expenses and decrease them wherever
practical in order to preserve profits.
Ted has learned that the one of the most important factors is the
weather. On rainy days, there are few
customers in the stores, while on sunny weekends all of his locations are
extremely busy. From spring through
fall, Ted keeps all his stores open seven days a week, while in the winter
months he opens his stores on the weekend when the weather is good for
riding. Through observation, Ted figures
his highest sales occur in May, and that June and September are his best months
for rentals. He also sells many bikes during
the holiday season in December, but in January and February, he often wonders
if he should close shop and go to Florida for a couple of months.
Old Dominion Trail Bikes grosses between $5 and $8 million
annually and earns Ted a comfortable six-figure income. Each year, he leaves a considerable amount of
cash in the business so that he does not have to borrow money. He sells a wide variety of bikes (from
tricycles for toddlers to sophisticated racing bikes) and accessories such as
helmets, speedometers, bike racks, repair kits, and clothing. Bicycle sales have decreased to account for
25 percent of revenues. Accessories such
as helmets, bike racks, gloves, and locks amount to another 5 percent. Rentals make up about 35 percent, and repairs
make up the remaining 35 percent.
In recent years, he has noted that customers are less likely to
purchase the high-end road and triathlon bikes and are purchasing bikes in the
range of $400 to $1,000. The lower
priced bikes are also easier to sell and to keep the cash flow moving.
Most of the rental business is concentrated in the D.C. store in
downtown and the Alexandria store, due to the tourists and university students
located near those stores. Ted is
excited about rentals, as they have a huge profit margin. He can charge as much as $50 a day, which
means the bikes pay for themselves after just a few rentals.
Ted’s expenses include the cost of goods such as new bikes and
accessories, rent and payroll. He
negotiates leases for all his locations except the Alexandria store, which he
owns outright. Ted has 15 full-time
employees and usually hires another 15 part-time employees during the busy
months and weekends.
Until two years ago, he was spending about $30,000 a year on
advertising in local papers. Now he uses
a simple website and has links on many of the local biking trail sites to
provide information about his various locations, and his advertising budget is
close to zero.
In the late 1990s, Ted over-expanded to six stores, including a
store in Purcellville, VA, and one in Bethesda, MD. The expansion necessitated a warehouse in
Springfield, VA, the hiring of a general manager and considerable overhead
expenses. In a subsequent cost-reduction
effort, Ted closed the Bethesda store, gave up the warehouse and moved his
inventory to the Vienna store, and let the general manager go. Now, he handles all the general management
tasks himself, which affects the time that he has available to plan and develop
strategies.
Ted further reduces his expenses by working in the Vienna store
two days a week. Since he has only one
staff person in some of his stores, he has to make special arrangements if that
person does not come to work, or takes a day (or week) off.
He is trying to expand the bicycle repair work, especially on the
weekends, so he will be able to increase revenue from this profitable aspect of
his business. He needs to have repair
capability at each store to maintain the rentals, prepare the new bikes for
sale, and perform the periodic maintenance for the bikes that he has sold, as
well as provide the breakdown repairs and adjustments for the riders on the
Trail.
In an effort to increase profits, Ted tries to get good deals from
his suppliers so he can realize a good margin on bike and accessory sales and
repairs. He looks for situations where
suppliers have more bikes in a line than they need and buys those bikes at a
discount for rentals and low-end sales, while maintaining a rapport with high
end suppliers so that he can offer his customers the best at reasonable
prices. By doing so, he can sell bikes
at a lower retail price with on-the-spot delivery while still realizing a nice
profit.
Ted has no bank debt and has long since repaid the $4,000 he
borrowed from his friend to start the business.
He feels that, because he has a diverse business strategy that addresses
the many different aspects of the local bike business, he will do well in the
many different economic climates as long as he is able to manage his varied
business. He also feels that he is
insulated from competition from Internet sales, due to the rental and repair
aspects of his business.
Questions:
1. List 3 strategic goals for Ted’s business and
provide an explanation of each.
2. Identify 5 specific types or categories of
information that Ted needs to run his business and explain why they are
important to him.
Ted would need an office (1) information system that Tded
could use to perform day to day office function such as creating distributing
documents for the office or personnel, send messages through email instead of
using the phone all the time to his other stores, for accounting purposes as
well as storing employee information, and building databases for his business;
(2) a transaction process system to maintain Teds’ customer invoices, customer
payments, employee timecards, printing receipts for clients, print checks for
employees, send coupons or greetings to customers as well as maintain data,
add/change data as well delete data; (3) management information system that
will help Ted to make sound decisions such as when he over-expanded his business,
track issues, solve problems concerning his business off of the reports
generated through the system to track sales, inventory, purchases or past due
balances for his customers; (4) decision support system used to help Ted make
difficult decisions in aspect of his business to make sure he is making a
profit and understand what needs to be changed to improve an issue such as how
to meet his sales quota for the month, quarter or year; and a (5) customer
relations management system would benefit Teds’ business by helping him tract
his customers sales to his different stores, tract inquiries from customers
throughout his chain of stores, track defective items from customers, and allow
Ted to interact with customers for service or feedback, and handle resolutions
to issues that arise with customers.
Davoren, J. (2014). Types of information systems in an
organization. Chron. Retrieved on
March
3. Identify and explain three business processes
that Ted likely uses in his business and explain how a technology solution
could help each one of them.
Ted most likely uses a workforce management process
- Ted has a
website with information about his stores.
Identify and explain two additional ways Ted could use
the internet in his business. Tie each use to a specific
e-commerce business model and
explain how that model applies.
- Explain
to Ted what a supply chain
management (SCM) system could do for his business and how it might improve his operations. Be sure to cover the full range of SCM functionality as
it applies to Old Dominion Trail Bikes.
- How
could Ted combine the information he gets from in-store customers with
those who purchase via the website into a single Customer Relationship
Management (CRM) system and what
three benefits would he gain from doing so?
- Ted would like
to increase repair work and rentals as they are the highest profit aspects
of his business and the Internet is not a competitor. What are three specific ways he could use technology to accomplish
this?
- Ted is not sure
if he should implement an Enterprise Resource Planning (ERP)
solution. Identify and explain three
benefits to an ERP for Old Dominion Trail Bikes. Identify
and explain two important considerations in implementing an ERP.
- If Ted
implements an ERP for Old Dominion Trail Bikes, he will need to know
whether the project was a success. List and explain three metrics (or measures) he can
use to determine whether the project was a success.
- Since neither
Ted nor anyone on his staff has any experience with information
technology, list and explain five things he should consider or
address as he proceeds with his IT projects.
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