ITECH1100 Understanding the Digital Revolution of Pajama Land Assessment Answer
Understanding the Digital Revolution
Pajama Land is a small clothing manufacturer. It specializes in custom made pajamas which are unique and one of its kind. The product is sold exclusively though online store. It is run by three members who divide the work amongst them. The financial data of past is evaluated using Excel software and its advanced function to analyze and calculate the cost of the operations to the company. The historical data is also analyzed to provide management related information to the businesslike the changes in the pricing of the products, varying quoted amounts, etc.
- Costs: - The total operating costs of the business is primarily divided into three types. The wages cost, the cost of utilities and fixed cost related to rent and insurance. The wages are calculated on weekly basis for 52 weeks per annum. The fixed cost are taken on annual basis and the utilities are taken on monthly basis for 12 months. The total annual operating costs for the business is calculated as $100,960. The working hours and hourly rates can be changed in the excel sheet to know the changes in total cost on any change.
- Order information:- The pricing process of the business is random and is subjective to the choice of material and personal experience of the staff member quoting the price. The historical order spreadsheet in excel is used to understand the change in price quoted for the products over the period of time and by different staff members. The pivot table and charts function is used in Excel to list the quoted amount of the pajamas for each type of material and size. The filter function is used in pivot table to enable the user to select the material and size of pajamas. The overall review of quoted price shows that there is high inconsistency in price quoted for the pajama of a certain type of material and size. The quoted price keeps on increasing and decreasing significantly. However over the time the quoted prices have increased for all products slightly. Further analyses in the quoted price shows a difference in the quoted price by each staff member. The business has Allen and Bakari who manufactures the pajamas and work on different days of week. Allen works on Mondays and Tuesdays while Bakari works on Wednesdays, Thursdays and Fridays. The data is presented in dates which is converted into week days using the “Text” function. Text(date, “ddd”) gives the name of weekday of the given date. Using the “if” function the staff who quoted the price for the product on a given date is identified. The pivot table is used to compare the prices quoted by the two staff members for the products. The review of the tables shows that there is significant difference in the prices quoted by the two staff members for the same products. In the beginning Allen was quoting higher price for products as compared to Bakari but gradually Bakari has started quoting high price for products.
- Price consistency: For long term sustainability it is important that the business quotes similar price for the same products for a given period of time. A pivot table is created in Excel which gives the quoting price for the products and average manufacturing cost on selecting the material and size of the pajama. The quoting price is taken at 10% markup on manufacturing cost. The 100% markup price is taken for quoting as it results in constant pricing method of the product and also ensures that the business is in profit. The increase in manufacturing cost is automatically incorporated in the price of the product. Also the price to be quoted is free from personal subjectivity of the employee quoting the price.
- Process Improvement: in order to increase the sales and improve the delivery time, Pajama land plans to identify few favorite products and start manufacturing them as soon as they receive the enquiry for the quote instead of waiting for the confirmation of the order. The orders placed for each type of product n past data are analyzed and products swhich constitute 5% or more of the total orders are considered as favorites and the manufacturing for them starts as soon as there is enquiry for the quote of the product.