Literature Oasis is a small second-hand book shop, run by a team of three staﬀ members: Arthur, Bakari, and Clancy.
For this assignment, you will complete the following set of tasks using Excel, and build an ePortfolio page to describe your work.
Task 0 - Setting up
Create an ePortfolio page for your assignment. You will submit this page to Moodle as per the lab tasks. You may call it whatever you like, for example ITECH1100 Assignment 1
Hours of operation
Most of the time, each team member works separate shifts: Arthur works 9:00 AM to 12:30 PM, Monday, Tuesday and Wednesday; Bakari works 9:00 AM to 12:30 PM, Thursday, Friday and Saturday; and Clancy works 12:30 PM to 5:30 PM, Monday to Friday.
The shop runs from 9:00 AM to 5:30 PM each day, except Saturday when it closes at 12:30. It is closed entirely on Sundays.
Arthur and Bakari are the semi-retired co-owners of the bookshop, and do not take a salary. Clancy, however, is a part-time employee, with total employment costs of $22 per hour. Clancy is also entitled to four weeks of paid annual leave, during which a casual replacement is required at a cost of $33 per hour. Fixed costs such as rent and insurance are $2900 per year, and utilities costs are $140 per month.
Task 1 - Costs of operating the business
Using Excel, create a spreadsheet called operating_costs.xlsx that calculates the projected annual outgoing costs of running Literature Oasis. Your spreadsheet should be conﬁgured such that the working hours, hourly rates, and ﬁxed and utility costs can be varied easily. Document your ﬁndings in your ePortfolio page (approximately 100 words).
Throughout the day, customers come to Literature Oasis to buy books, and occasionally to sell them. When people bring in books to sell to Literature Oasis, the staﬀ member on duty will review the books and make an oﬀer for each one individually. Currently, the process for determining how much the book shop will pay for a book is entirely subjective. Staﬀ members oﬀer an amount per book based on the quality of the book, and how popular they think it is, and how they are feeling at the time. The sale amount is always simply double the amount paid and is set at the same time - if Literature Oasis pays $3.00 for a book, they will put it on sale with a marked price of $6.00. (Literature Oasis does not deal in rare or antique books) For several months, staﬀ have been keeping track of the date and time, quality, publication year and amount paid for each book in a spreadsheet. This spreadsheet is available for download on Moodle.
Task 2 - Sales team oﬀers
Using Excel, process the history of purchases spreadsheet and use appropriate charts to visualize: How the prices paid diﬀered for each staﬀ member; and How the prices paid have changed over time Describe your ﬁndings in your ePortfolio (approximately 250 words), and attach the Excel ﬁle to your page
Arthur and Bakari want to improve the consistency of how they pay for and price books. They'd like to standardize on three standard price oﬀers, and have designed the following process to determine how to allocate them, including the option of rejecting the book altogether. The staﬀ have already agreed on how to determine whether a book is terrible, poor, or good.
Task 3 - Automation
Using Excel, create a spreadsheet page that automates the above process, allowing a member of the team to enter whether the book is hardcover, its publication year, and its condition, and receive a price to oﬀer. Ensure that you include enough text and formatting to make your spreadsheet usable by a member of the Literature Oasis team, or by a University lecturer. Your spreadsheet should be conﬁgured such that the Low, Medium and High prices can be varied easily. Describe how you automated the process (approx 150 words), and attach your Excel ﬁle to your ePortfolio.
Task 4 - Price setting
Using Excel and the historical data you have available, determine sets of prices which meet the objectives of the following scenarios:
Scenario one: Total oﬀer prices are approximately the same as for the historical data
Scenario two: Assuming all books purchased are sold, allow all staﬀ to draw the same wage as Clancy.
Describe the strategy you used to ﬁnd appropriate prices for each scenario (approximately 150 words). Ensure that the Low price is less than the Medium price, and both are less than the High price.
Bonus challenge task (optional!)
Disclaimer: This task is 100% optional, and you can receive full marks without attempting or completing it. It is intended to be a challenge if you are interested in such things, and the marks available do not reﬂect the signiﬁcant research and eﬀort required to implement it correctly. Tutors will not provide signiﬁcant assistance for this challenge task.
Optional task 5
Below is the screenshot of operating expenses created for Year 1 till Year 5:
The excel sheet provides various pivot tables and charts generated basis different employees. A screenshot is as follows:
It can be seen that prices vary a lot within various categories. For example, while Clancy seems to be giving higher than average price for ‘Good’ books, Arthur seems to be doing it for ‘Poor’ or ‘Terrible’ books. Similarly, Clancy is giving higher than average price for both old and new books by the publishing date criteria while Bakari is doing this for New books. While Paperback pricing is somewhat similar, there are huge differences in pricing of hardcover books between three employees. This will lead to distortions, particularly if we take into account the number of books purchased by each employee. For example, Clancy purchased maximum number of good books and since she is giving the highest price, it will lead to more distortion in overall expenses. Further, she is working five hours every day which means she is dealing more as seen by total number of books purchased by her (480) as compared to Arthur (122) and Bakari (106). The variations become clearer with following graph:
The tab named automation helps the staff to take decision consistently by creating scenarios based on historical average pricing. Three scenarios have been created: Good, poor and terrible. The screenshot below indicates various possible situations and once a scenario is generated, the corresponding price will be reflected in the Row named “Price”:
A spread sheet sample is created using list dropdowns to streamline the formatting etc. Input is required in range cells and output will come in white cells.
If the book is terrible, it is rejected straightaway. If the book is published 15 years ago than today’s date, the price range is reflected as low and otherwise, the price range is high. This gives an indication to staff as to where the price offered should be, high, low or medium.
Using these two tables in conjunction will help to streamline and automate decision making.
Scenario 1: Historical overall average was used to generate scenario:
However, as seen, the average of good condition, old paperback ($4.20) is more than good condition, new paperback ($3.90) which is not logical. The price offered for new book should be more than that for old ones (by publishing year criteria). Further:
If we prepare a table of historical average high, medium and low prices:
Clearly, some of the low prices are higher than the “high” price which is not logical. Hence, we should not rely on historical average method. Rather, new price range should be determined by the staff in consultation and agreement.
Scenario 2: Same wages for all:
Hypothetically, we can assume following prices as high, medium and low:
|$6.50 (good hardcover new)||$2.50 (good paperback new)||$2.00 (good hardcover old)|
|$3.50 (poor hardcover new)||$1.50 (poor hardcover old)|
|$1.50 (good paperback old)|
|$1.50 (poor paperback old/new)|
Here, all conditions will be met with low price being lower than both medium and high.
Further, if we go by historical offer price data provided, the store is purchasing worth $300 books and Clancy is drawing $22 per hour. Clearly, this is not a sustainable model.
The store either needs to sell much more books or increase prices to more than double of purchase price or look for cheaper staff.
If the remaining two also draw salary, there will be a cash crunch at this rate. Hence, the store must look into various expansion and cost cutting options.