Auto Fleet is a company that deals in selling of new cars to a large number of customers ranging from individual to car rental companies. Its main customers are the car renting companies that form a large chunk of the company’s sales per annum. The management indicates they have been observing a decreasing trend in sales and the management board projects that at the moment, they will not be able to make the projected sales and profits that they have recommended to the financial analysts including the news media and the financial press. This is a bad reputation for the company. This paper focuses on the analysis of the situation to provide a professional view for decision-making purposes.
The idea is can backfire as some of the management board members fear. However, this challenge can be o overcome in a number of ways. First of all the implementation has to be in stages. The client company will have to pay a full amount from the next purchase they make including the discount valuation. This discount amount will be carried on to the next subsequent purchase if they agree on buying the cars at the specified amount. This way the company will have enough capital to sustain extra costs before launching the program full scale. It will also give the company a chance to restock in time for other customers. The clients will also be required to sign a deal to allow for efficiency. Once the program is up and rolling the discount can be reduced slowly to a certain final value agreed upon.
This can be represented better using a causal loop model as shown in figure 1 below.
Figure 1 showing a control loop diagram for Auto Fleet Discount Case.
Works Cited
