Assessment Task 2 – Individual Quantitative Literacy Case Study
Assessment Task 2 is Fermi Problem. In Strategic Management we are using the Fermi Problem to demonstrate quantitative
numeracy skills. Students will, with limited data make effective, and approximate calculations to model the efficiency of an
organisation. This is a synthetic study, and there is no right or wrong answer to the Fermi Problem, however some answers may
be proven to be more detailed and accurate than others.
The purpose of Assessment Task 2 is to have students undertake a strategic analysis demonstrating quantitative literacy.
Quantitative literacy is a requiredGraduate Capability for this subject.
Quantitative literacy will be assessed within the following subtasks:
- Creation of a numeric dataset based on specific organizational activities;
- Interpretation of that numeric dataset;
- Creating a synthetic model showing calculations with the dataset as a basis;
- Extrapolation and explanation of outcomes for the synthetic model.
Case Background and Requirements:
You are the owner of two businesses. A third unrelated business operates in local competition to you.
Your Business 1: A valet car wash operating in shopping centre with four hand washing bays and two vacuuming bays. The car wash operates 8 hours per day, 6 days per week. There are 12 employees on the line, each employee is entitled to a 1 hour break in every 8 hours. Employees are distributed across the bays equally. Your business charges $40 per wash and $10 per vacuum. Each car takes 20 minutes to wash. Each car takes 10 minutes to vacuum. Assessment Task 2 – Individual Quantitative Literacy Case Study
- Calculate the maximum gross revenue of the business operating all bays continuously in a 48 hour period.
- Calculate the maximum gross revenue of the business operating with employee breaks included and all bays active only 75% of the 48 hour period.
Your Business 2: You are also the owner of a kebab van operating adjacent to the car wash. The van is active from 12noon to 2am 7 days per week and employs four staff on continuous duty. Staff are rotated out of the van every 8 hours and are entitled to
a 1 hour break. The production time for a kebab is 5 minutes. 6 kebabs can be produced simultaneously. Each kebab is sold for $10.
- Calculate the maximum gross revenue for the kebab van in every 98 hour period.
- Calculate the maximum gross revenue for the kebab van in every 98 hour period inclusive of employee breaks.
- Calculate the maximum gross revenue for the kebab van in every 98 hour period inclusive of employee breaks operating at 75%
There is a coffee shop adjacent to the car wash and kebab van with a seating capacity of 16 people operating in the same 48 hour period as the car wash. It currently services the customers attending your car wash. You do not own the coffee shop. You know the coffee shop services 60% of your car wash customers. You know coffees are charged a $4.50 and have a production cost of 30 cents. The coffee shop employs a barista and a waiter who work 8 hours per day. They often socialise with your employees during their mandatory 1 hour break in any 8 hour shift. You suspect the coffee shop is quite profitable. Assessment Task 2 – Individual Quantitative Literacy Case Study
- Make a case for either opening your own coffee shop in competition, or making an offer to purchase the coffee shop based on gross revenue calculations.
You are to provide a response to this problem in approximately 1200 words (+/- 10%):
- An introduction, main body, and conclusion must be provided.
- Diagrams and calculations in tables will be essential.
- References are NOT required for this submission.
- Students should assume their examiner is NOT an accountant or a data-analyst and must provide written explanations for each
table and model.