This 5 page paper looks at a case study. A company has three scenarios; the paper calculates the impact of each scenario on the income of the company and then recommends a scenario based on the financial analysis, explaining why the most profitable result was not recommended. The bibliography cites 4 sources.
Name of Research Paper File: TS14_TEcompcore.rtf
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scenario we need to look at what income would be generated and the costs associated with the income. We have the current figures where the company gets only a percentage
of that income. The first scenario sees the company proposing to take over the small jobs only. Looking at the level income we need to calculate the level of
income from parts and labour that would be obtained if the company were to take over this part of the servicing as well as the cost of the parts t
the company. The parts are sold to the subcontractors at cost plus 15%, by taking the current income form the parts and assuming this is 115% of the part cost
we can calculate the cost of the parts to the company. However we will assume that the current income form the parts is the net income after the parts are
paid for. We are told that the subcontracts charge the cost they pay plus 30% this will tell us the potential level
of income from these sales. The labour fees paid are only a small percentage of the labour fees, the subcontractor currently keeps 75% of the non contract and 80% of
the contract work, this means that the company only receive 25% and 20% respectively, these need to be multiplied up to 100% to assess the level of income that would
come from labour. Scenario 1 we look at the amount that will be lost as income for the contractors and how much this will be replaced with from providing
the service in-house. Total current income (a) Small systems (b) Small systems only current income (a x b) Potential Income* Parts Contract
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