Testing Performance Indicators - Total Sales Revenue - Management Assignment Help

Assignment Task :

It is one year since the business plan was implemented and as the Operations Manager, you are reviewing the performance of the business against the performance indicators identified in the plan, testing performance indicators used and recommending changes to performance indicators as provided. 

Assume that the performance indicators identified in the business plan are as follows:

• A 20% increase in total sales revenue.  

• 80% of customers have opted for environmentally friendly cleaning products, despite costing them 10% more.

• A gross profit margin of 20%.

• Reduction of 50% in debtor days

• 10 new commercial customers in the first year of the business plan. 

• Reduction of 10% of workforce turnover based on employing two full-time permanent cleaners, as well as increasing wages to above award.

Data provided by the accountant for this financial year show the following figures:

• Total sales revenue: $450,000

• Total cost of sales: $320,000

• Debtor days: 30

• 15 new commercial customers 

The Administration Manager has advised you that at least 10 of the previous residential customers no longer use the company’s services, so while sales revenue has increased, the sales revenue attributable to residential sales has declined.  

In addition, follow up emails to the customers who no longer used the services indicated the following responses to the question asked about why they no longer use the services:

• Moved interstate: 1

• Dissatisfied with the quality of cleaning services provided (not enough attention to detail, cleaner finishing earlier than time paid for): 5 

• Moved to a competitor as better service and price offered: 4

There has been a 40% increase in general enquiries from potential customers, virtually all of whom have heard about Ozhouse Clean due to the activities implemented in response to the Business Plan.

Ozhouse Clean has also been contacted by over a dozen potential new contract cleaners following recommendations by existing staff, mostly due to the wage increase.

The family members managing the company are overall satisfied with the changes to the company’s marketing activities, and the way the Operational Plan has been acted on.

Complete the following activities: 

Prepare to develop monitoring and evaluation report

Review the scenario information. 

Develop an outline for your report ensuring that:

• Your report will address a balance of both financial and non-financial information on business performance as per the scenario information. 

• Review the performance indicators listed below and determine whether any further indicators are necessary to evaluate the company’s performance

• Profit and loss

• Community awareness or brand awareness

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