Running head: SITUATION ANALYSIS AND PROBLEM STATEMENT: BURNS AUTO CORPORATION
Situation Analysis and Problem Statement: Burns Auto Corporation
University of Phoenix
MBA 510
6/5/06
Situation Analysis and Problem Statement
Besides the main objective of earning the optimal amount of revenues for its shareholders, a business must also make sure that it keeps its cost of operating at a minimum level. By reducing its costs, and maintaining or increasing the amount of revenues, the business increases its net profit. Increased profits also result in a higher value of the business to potential investors.
Situation Background (Step 1)
Burns Auto Corporation, owned by Thomas Burns, consists of twenty-five new car dealerships selling cars produced by foreign automakers. The corporation has made its major presence in the western region of the United States. Being in business for twelve years, Thomas Burns has established dealerships in large automobile parks adjacent to freeways or on very busy streets in Albuquerque, Boise, Denver, Las Vegas, Phoenix, Tucson, and northern and southern California. Thomas Burns acquired the dealerships over a five-year period after ending an athletic career. The success of the business has been largely credited to the efforts of Richard Settle, the friend and business partner of Thomas Burns. Richard Settle, Burns Auto's Corporate President and Sales Manager, worked in the automobile industry in Detroit for a large American automaker before being hired by Thomas Burns.
Thomas Burns, concerned about how well the firm is doing, wants to adopt a new solution to managing inventories and forecasting sales, especially now that all manufacturers have mandated a "turn and earn" approach to managing inventories ...