Buy custom Sensitivity Analysis of Sims Auto Center essay

Sims Auto Care is a small scale motor repair shop with a staff of four consisting of the boss/ owner and three auto mechanics. The shop has not embraced technological advances that might make management convenient. The owner and manager of the enterprise, Jeff, is skeptical about the efficiency of such systems. The shop has a stable influx of customers coming in for oil exchange, brake, radiators and tire repairs. The average of oil changes that one mechanic does in a day are prevailing at 15. Brake jobs average at 5 per week while the radiator jobs come along at least twice a week for each mechanic. About 10 tire maintenance procedures take place in the auto shop weekly. This shows the traffic of customers in the shop in the current competition is stable thus the shop can survive in the industry.

The shop only stocks air filters, oil filters, serpentine belts and bulbs for the repair services that customers subscribe to in it. Brake pads and radiator hoses t are ordered every time a customer requires them during a brake repair or radiator servicing. The owner of the shop is afraid of the idea of stock staying on the shelf for long and eventually not being purchased. This leaves the company under the mercy of the auto part store that delivers these spare parts to the shop in case they need them. The shop has remained rigid in its operations without barging because of the comfort zone in which the owner of the store is in currently.

The spare parts that are in stock at the store offer the shop a convenient way to service prevalent repair services. Oil exchanges top the list of the services that get carried out in a day, and thus the shop saves on time, costs and increase profits by selling these items. The cost of oil exchanges in bulk from manufacturer’s is about $4-5. In retail stores the cost of oil filter averages $7; therefore the shop saves a considerable amount of finances by having them in the store. The shop also saves on the extra costs on delivery of the oil filters to the shop whenever they are needed. The time wasted (about 30 minutes) while waiting for the oil filters to be delivered is eliminated, and thus the customers appreciate the speedy service delivery. This improves customer relations and public reputation giving the shop an increased customer base. This culminates in an increase in the profits of the company.

The serpentine belts and air filters offer the same perquisites as the oil filters do

They daily demand is high and thus they are procured from the manufacturers at subsidized prices unlike the retail shop prices that are high and include delivery fees. The reduction of operation costs and time ensures the shop remains profitable and ensures the management remains vigilant in improving the enterprise.

Brake pads go for an added $5 at the retail store that Sims Auto Store orders them compared to the $29 cost from the manufacturer. The delivery services cost the shop an extra $7 dollars that further increases the cost of services within the shop. High prices are repellant to customers resulting in a low consumer turnout. This has injurious effects on the state of the company as the company relies on them entirely for its revenue. In case other ventures that compete with Sims Auto Shop establish themselves in the area, the shop will suffer a loss of customers if the other enterprises engage in a price war. The brake servicing procedures that take place within the shop are relatively fewer than the other services, and thus the risk of the spare parts staying for long on the shelf is high. However, the items do not have worrying shelf lives. This eliminates the risk of the brake pads and discs being unusable after their purchase, at a profitable, low price. The glitches that arise from the slow and inefficient delivery services make the insurance of stellar services minimal within the shop. Jerry’s pessimistic attitude makes the shop sit on a significant potential to make more profits than it now. The brake services would cost the customers much less of they were sold within the shop thus making the shop have an advantage of controlling pricing.

The radiator hoses cost the customers an average $25 dollars bearing in mind it costs $3 higher than the manufacturer costs in the retail store and the added delivery costs. Such repair services can bring the shop more profits than they currently realize if it partook in every aspect of the transaction. The frequency of radiator repairs that the shop realizes is low relative to the other services offered in the shop. Therefore, it would be wise for the shop to make much profit from the few times and increase the number of return customers. This can be achieved by the stocking of radiator hoses to make a profit on every purchase albeit at a lower price due to the exclusion of delivery fees. The time saved from the proximity of the spare parts to the stores increases the satisfaction of the customers as they will not be kept waiting for long before their cars get repaired.

Conclusively, the additional stocking of radiator hoses, brake pads and discs in Sims Auto Shop increases customer satisfaction and the shop’s profits. This exemplifies the significance of horizontal progress in an establishment before the enterprise scales the heights of success. Success in this case envelops the increased customer turnout, and consequentially the profits of the shops.

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