Answer To: ISYS2059 BUSINESS INFORMATION SYSTEMSRMIT Classification: Trusted ASSESSMENT TWO TERM 1, 2021...
Komalavalli answered on Mar 07 2021
1
Contents
Introduction 3
Outline of Tap Galore 3
Analysis on products 4
Graph of Chrome finish product 4
Graph of Black finish product 4
Graph of Matt Black finish product 5
Graph of Gold finish product 5
Predictive analysis 6
Demand for the product finish: 7
Analyzing the impact of offering free delivery on Gross profit: 7
Conclusion: 8
Recommendation: 8
Introduction
This report focused on analyzing the gross profit for Tap Galore .It focused on finding the most demanded product finish; find which kind of product finish such as chrome, matt black, black and gold finish product that contributes to high gross profit. The predictive analysis use regression method to find whether offering discount rate contributes to gross profit or not and also to find whether offering free delivery contributes to gross profit or not.
Outline of Tap Galore
From the datasets we can say that the Alex and Ash stocks a range of Taps from six manufacturers such as Franke, Clark, Fantini,Abey, Phoenix, Mondella. They brought Basin mixer from Clark at $60 and sold at $80.19 received a gross profit of 20.19, brought Basin mixer, bath mixer, water saver shower kitchen tap mixer from Mondella cost ranges from $125 to $155 and sold at a range from 167.91 to 205.71 received a gross profit of 42.91 to 50.71,
They both brought Basin mixer, Basin sink mixer, Basin Tap set from Abey cost ranges from $135to $150 and sold at a range from 180.51 to 198.99 received a gross profit of 45.51 to 48.99. Brought Basin mixer, Basin sink mixer, Basin Tap set from Franke cost price is $160 and sold at $211.59 and received a gross profit of 51.59. Based on the finish of product such as chrome, Black, Matt Black and Gold we can analysis the relationship between Gross profit and Total Revenue.
Analysis on products
Graph of Chrome finish product
The above graph indicates there is a large amount of fluctuation between the total revenue and gross profit(GP). The GP for the product that has chrome finish ranges from ($150.79 – $153.99)
Graph of Black finish product
The above graph indicates there is a no fluctuation between the total revenue and gross profit. Gross profit increases with increase in total revenue of the product. The GP for the product that has black finish ranges from ($19.73 – $137.47)
Graph of Matt Black finish product
The above graph indicates there is a little fluctuation between the total revenue and gross profit. The GP for the product that has Matt black finish ranges from ($20.19 – $137.47).
Graph of Gold finish product
The above graph indicates there are a few fluctuations between the total revenue and gross profit. The GP for the product that has Gold finish ranges from ($150.79 – $153.99)
From the entire graph we can say that there is no fluctuation in gross profit for the product which has Black finish and high fluctuation in gross profit for the product which has Chrome finish. Therefore selling Black finish will increase the Taps Galore gross profit constantly.
Predictive analysis
Regression Statistics
Multiple R
0.759572
R Square
0.576949
Adjusted R Square
0.576495
Standard Error
46.13595
Observations
934
ANOVA
df
SS
MS
F
Significance F
Regression
1
2705454
2705454
1271.046
2.72E-176
Residual
932
1983786
2128.526
Total
933
4689240
Coefficients
Standard Error
t Stat
P-value
Lower 95%
Upper 95%
Lower 95.0%
Upper 95.0%
Intercept
-51.97
3.71
-14.00
0.00
-59.25
-44.69
-59.25
-44.69
$ discount
3.21
0.09
35.65
0.00
3.03
3.39
3.03
3.39
From this linear regression analysis we can say that there exist a positive relationship between discount rate and gross profit. The p value of discount rate is 0.0 which is less than 5%, so this variable is significant at 5% level of significance. One dollar increase in discount rate on an average increases the gross profit of Taps Galore by 3.21 dollar.
I have also conducted the regression analysis between gross profit and delivery charge. It is found that there is no relationship between both the variables.
In order to have future sales growth Alex and Ash has to focus increasing discount rate. Because increasing discount rate leads to increases sales and gross profit of the Taps Galore.
If Taps Galore’ offered free delivery for all purchases over $100.00, it will lead to increase the cost for the products and decrease the total revenue.
Demand for the product finish:
The demand for gold finish product was less. Only two consumer Singapore bathroom Renovation and ACC construction bought gold finish products. For chrome finish product the demand was relatively higher, because it has above 50 customers. The product that has Matt black finish also have low demand, the demand for this product arises from only ten consumers. The product that has black finish also have relatively low demand, the demand for this product arises from above ten consumer.
Analyzing the impact of offering free delivery on Gross profit:
Before offering free delivery to the customer who purchase Black finish product worth above $100 results in gross profit of a range $150.79 to $153.99, who purchase Chrome finish product worth above $100 results in gross profit of a range $42.91 to $137.47, who purchase Matt black finish product worth above $100 results in gross profit of a range $42.91 to $137.47, who purchase Gold finish product worth above $100 results in gross profit of a range $118.79 to $137.47.
After offering free delivery to the customer who purchase Black finish product worth above $100 results in gross profit of a range $140.80 to $144, who purchase Chrome finish product worth above $100 results in gross profit of a range $32.92 to $127.48, who purchase Matt black finish product worth above $100 results in gross profit of a range $32.92 to $127.48, who purchase Gold finish product worth above $100 results in gross profit of a range $108.80 to $127.48.
Overall offering free delivery for those who purchase above $100 will result in decreasing gross profit. Therefore it’s not a good idea to offer free delivery option.
Conclusion:
From this analysis we can conclude that the demand for chrome finish is high and discount rate has positive impact on gross profit.
Recommendation:
In order to increase the sales Alex and Ash should offer more discount for Black and Gold finish products and offer less discount for the products that has Chrome and Matt black finish. Secondly Alex and Ash should expand their marketing strategy by investing in various kinds of advertisement. Thirdly it should expand the business to a place where the demand for Tap Galore product is higher. Offering discount on products will attract more consumers and increase the demand for a product, expanding marketing strategy will give a reach for the product , the people who don’t know about the product will come to know about the existence of such product and buy more of it. Expanding the business will lead to attract more people to consume that product. Overall adopting this strategy leads to attract more consumers.
Matt...