McAdam Case Study Questions and Answers

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McAdam Case Study Questions and Answers

442 McAdam 9B16B010 from Ivey

 

The McAdam case is short. Four pages.  The questions below focus on the financial aspects of the case.  The objective of this exercise is to demonstrate just how much information can be obtained by using arithmetic for a quantitative analysis.

Instructions:

  1. Please provide a written response to questions.
  2. Due: Before class Week 6. Send as a Word document to
  3. Label you answer document as follows: your first name and last name assignment name

 

Questions Level 1 – Solid understanding of the facts Level 2 – Summary observations of the situation Level 3 –

Options, conclusions, recommendations

  
1. What are Shell’s goals for McAdam?   1    

 

 

 

2. Calculate McAdam’s unit sales projections for 2016 and 2017. Use the table below. 2      

 

  Retail Store Sales Online Sales Total Unit Sales
Projected Fiscal 2016      
Projected Fiscal 2017      

 

 

 

 

 

3. Calculate the manufacturers’ minimum order sizes. 2      

 

  # of different handbags

(5 designs X 4 Colours X 2 seasons) X minimum manufacturer’s order size per # of different handbags

 Manufacturers’ Minimum Order
Local    
Overseas    

 

 

 

4. Subtract unit sales projections from minimum manufacturer orders

This table shows the number of handbags in excess of projected sales.

 1      

 

  Local Manufacturer – Extra Handbags Overseas Manufacturer – Extra Handbags
Projected Fiscal 2016    
Projected Fiscal 2017    

 

 

 

 

 

5. Calculate how much money Shell will make for each unit sold (unit contribution) for local and international manufacturing.

Then, calculate the unit contribution as a percentage of the wholesale and online sales prices (Contribution Margin Rate). Use the tables below.

 2      

 

Local Manufacturer

  Unit Contribution Contribution Margin Rate
Wholesale (sales to retail stores)    
Online (direct sales to customer)    

 

International Manufacturer

  Unit Contribution Contribution Margin Rate
Wholesale (sales to retail stores)    
Online (direct sales to customer)    

 

 

 

6. Based on, and referencing, your mathematical analysis, above, what two or three conclusions do you draw?   2    
Total 10       10