4. Case Study – Lightning Wholesale
Lightning Wholesale is a mid-to large-size company that works directly with manufacturers to bring sporting goods and equipment to mid to small-sized retailers. The company is in Southern Ontario, Canada. Lightning Wholesale acquires the goods, stores them in its warehouses, and distributes them to retailers, who then sell them to sporting enthusiasts across the province. Suppliers are global, including those from the United States.
Lightning Wholesale is a dynamic office with global networking, communications, customer service, and complex workflows. Lighting Wholesale depends on its office professionals to support staff and management. Office Professional tasks include clerical support, bookkeeping, customer service, data analysis, and document processing.
Lightning Wholesale cares about its employees and retailers. Where managers can assist their employees, they try to. Where retailers need guidance, Lightning Wholesales tries to fill this gap as best they can. In working with its small retailers, many of which are owned and operated by sole proprietors, Lightning Wholesale assists the owners with their pricing to help develop promotional pricing plans and the amounts of the payments that can be advertised. Lightning Wholesale freely offers help since it means more sales and increased profits for the company.
There are currently a few main tasks for Lightning Wholesale management:
- The payroll needs review for the past fiscal year.
- Costs and expenses need forecasting for the next fiscal year.
- Detailed analysis of office supply orders from quarter to quarter with recommendations for the next fiscal year.
- Forklifts need replacing in the warehouse.
- The next round of co-op students needs a computer.
- The employee appreciation event needs planning for next year.
- Travel expenses for the mobile team need to be summarized for the last fiscal year.
Lightning Wholesale needs to predict dollar sales for each month in 2022. A variety of techniques are used in business to forecast sales. One technique examines the year-to-year change in sales. Thus, the management at Lightning Wholesale has decided to perform a historical three-year analysis of both average monthly sales and average yearly sales to grasp how these figures have changed. Once the change is understood, the averages will be used to project the sales for each month in 2022.
| Yearly Sales | January | February | March | April | May | June | July | August | September | October | November | December |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2019 Sales | $4,345 | $1,562 | $2,345 | $3,589 | $2,885 | $8,896 | $5,236 | $4,236 | $4,226 | $5,300 | $11,596 | $8,136 |
| 2020 Sales | $1,345 | $4,522 | $6,785 | $4,580 | $9,885 | $2,876 | $5,136 | $8,236 | $3,216 | $3,369 | $12,500 | $5,479 |
| 2021 Sales | $4,345 | $1,562 | $2,345 | $3,589 | $2,885 | $1,896 | $4,236 | $9,236 | $5,569 | $4,369 | $13,590 | $12,136 |
Questions
- Using the sales data from the above table for the years 2019, 2020, and 2021:
- Calculate the average sales for each month.
- Calculate the average sales for 2019, 2020, and 2021.
- Based on the information from a and b, make sale predictions for 2022 for each month and overall.
- Lightning Wholesale covers the cost of customer service representatives monthly cellphone costs. After reviewing last year’s expenses, management would like to evaluate the average monthly cost per employee. Here is the list of plans and monthly expenses for the customer service reps.
| Providers | # of employees | Monthly Cost |
| Cellphone Provider #1 | 2 | $95.99 |
| Cellphone Provider #2 | 3 | $109.95 |
| Cellphone Provider #3 | 10 | $129.99 |
| Cellphone Provider #4 | 5 | $85.99 |
-
- Calculate the average monthly cost of the cellphone costs per employee.
- What recommendations would you give to management based on the data?
Unless otherwise indicated, this chapter is an adaptation of the eTextbook Foundations of Mathematics (3rd ed.) by Thambyrajah Kugathasan, published by Vretta-Lyryx Inc., with permission. Adaptations include supplementing existing material and reordering chapters.
