William MIS 3003 Homework 3.docx - William Besong MIS 3003 Chapter 3 Homework 3-1 Figure AE-1 shows an Excel spreadsheet that the resort bicycle rental

# William MIS 3003 Homework 3.docx - William Besong MIS 3003...

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William Besong MIS 3003 Chapter 3 Homework 3-1. Figure AE-1 shows an Excel spreadsheet that the resort bicycle rental business uses to value and analyze its bicycle inventory. Examine this figure to understand the meaning of the data. Now use Excel to create a similar spreadsheet. (4 pts) a. Figure AE-1 uses the following formulas: Cost of Current Inventory = Bike Cost * Number on Hand. Revenue per Bike = Total Rental Revenue / Number on Hand. Revenue as a Percent of Cost of Inventory = Total Rental Revenue / Cost of Current Inventory. Use these formulas in our spreadsheet, as shown in Figure AE-1. Input raw data as the Figure AE-1. Make of Bike Bike Cost Number on Hand Number of Rentals Total Rental Revenue Wonder Bike \$325 12 85 \$6,375 Wonder Bike II \$385 4 34 \$4,570 Wonder Bike Supreme \$475 8 44 \$5,200 LiteLift Pro \$655 8 25 \$2,480 LiteLift Ladies \$655 4 40 \$6,710 LiteLift Racer \$795 3 37 \$5,900 b. Give three examples of decisions that management of the bike rental agency might make from his data. i) The management may increase the number of Wonder Bike II bicycles since its revenue is very high which will reduce the percentage of cost of inventory.

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ii) The management can also replace LiteLift Pro bicycles with Wonder Bike
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