Operations Managment

In: Business and Management

Submitted By mv1075
Words 644
Pages 3
Melanie Vijarro
BMGT 4345

Case #4 Page 847
#1,2,3 & 5

Draw a diagram of OSP’s cash flow cycle. Explain the cash flow difficulties described by Josh Frey and Dave Burnett (refer to the Case-in-Case). Why did Frey’s strategy of more sales fail to improve OSP’s cash flow?

The cash difficulties described between Josh Frey and Dave Burnett stated that if you have accounts payable due $3,000,000 and your accounts receivable is $5,000,000 but not for 30 days you have some big problems. Frey’s strategy failed for more sales to try to improve OSP’s cash flow is because of the reason stated previously. If you keep selling, which is a good thing but you do not request a percentage down from your customer you will be in the hole due to insufficient funds on hand to order the merchandise you need to fulfill your sales order that you have taken as well as payroll and other company related costs. This alone can bring a company down and keep it from ever being successful.

Discuss OSP’s “replicable sales process.” Why is this issue so important to OSP’s success?

OSP’s replicable sales process is based upon how he runs his business. As he stated, “when OSP did accrue more cash, it was plowed into growth.” He knows how to sale and he has a good staff that he has trained very successfully. His theory is that there is an equation to sales, first phone calls, then emails and meetings leads to prospects then to sales. He is known for having such a replicable sales process, which is why he remains in business today.

Draw a diagram of the “sales equation” that Frey describes in his memo. Estimate the numbers at each step.

Artemis Bid
|Need: |100,000 units of 4 different products, total of 400,000 |

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