Project Development and Optimisation Behavior †MyAssignmenthelp

Question: Discuss about the Project Development and Optimisation Behavior. Answer: Introduction: The current report is based on the evaluation of alternatives for Dick Smith Holdings Ltd. The report will be focussing on the development of the alternative for the purpose of decision making situation and would further consolidate the decision by providing an estimation of cash flow items. The cash flow items would be taking into the considerations the both the inflow and outflow of cash for each of the alternatives identified. The bases for estimation of the alternatives for Dick Smith Holdings Ltd would be identified in the project and the relevant use of other parameters will be considered to assess the economic analysis of the activity. An application of both the alternatives will be considered and following the analysis one best alternatives will be recommended for Dick Smith Holdings Ltd. The project will further devise the understanding of the concepts along with the practical application of the principles relating to the cost driven design of the project optimisation. The consumer decision making process has been considered for Dick Smith Holdings Ltd. The process will commence from the analysis of the need recognition or problem statement. Additionally an information search will be considered for Dick Smith Holdings Ltd to consolidate the findings from the alternatives with evaluation of the alternatives. The primary step for Dick Smith Holdings Ltd to improve the falling demand of the consumer is the need recognition. Need recognition takes place when a consumer recognises and identifies the product that would meet its need (Solomon et al., 2014). Dick Smith Holdings Ltd should consider the need or the problem identification of the consumers as this is considered to be primary step in the process of decision making. An important part of need recognition is that if a perspective consumer does not perceive a problem he would generally not move forward with the consideration of purchasing the products of Dick Smith Holdings Ltd. The problem or the need recognition for Dick Smith Holdings Ltd could mark the beginning of understand the falling demands and sales revenue. As under this step Dick Smith Holdings Ltd would be able to identify the consumer need and the problems effecting the demand for the company. Subsequently, the company would also be able to resurrect its cash flows by developing the products and services that meets the need of consumers (Frederiks et al., 2015). The problem and need identification in decision making process is an important step because consumer does not perceive a problem or need, they would not be able to move with the idea of considering a product purchase. Information search: For Dick Smith Holdings Ltd information search is key to the consumer decision making procedure as under this process it can identify what a consumer searches for the internal and external information. The consumers under this process generally looks for the available options. Dick Smith Holdings Ltd can under this circumstance can recollect the product that are triggered or guided by the personal experience of the consumers (Lin et al., 2018). Dick Smith Holdings Ltd can conduct an external search when a consumer that has relatively less amount of knowledge regarding a product seeks for the information that has prior understanding of the product from the personal sources and public sources or the market dominated sources. For Dick Smith Holdings Ltd information search can be categorized as the internal or the external research. The company can consider external search when a consumer does not have any prior understanding of the product (Baker, 2014). This ultimately leads a consumer to seek for the information from the public or market dominated sources. In the event of the falling demand and sales Dick Smith Holdings Ltd can consider employing a sales person or advertising particularly when a customer knowledge is relatively limited or appears to be insufficient. The company should consider including a sales person advice in the retail store as they would help in identifying the consumer needs and demand patterns resulting in improved sales and better inflow of cash (Hausman, 2014). Dick Smith Holdings Ltd should consider employing market dominator approach of advertisement such as company website as the example of non-personal source of promoting its products. Evaluation of the alternatives: Under this stage of consumer decision making process an evaluation of each alternatives can be performed by the Dick Smith Holdings Ltd to assess its product that are accessible on the scale of consumer personal attributes (Martindale McKinney, 2017). During this stage the company should consider evaluating all their available products based on the scale of attributes that would have the ability of generating benefit which the Dick Smith Holdings Ltd is currently seeking for. In the order of marketing, the company requires increasing the likelihood that their brand could be a part of evoked set for several consumers. Dick Smith Holdings Ltd should understand the sort of benefits sought by the consumers and should focus particularly on the attributes of its products that would create an influence on the decision making process. An important consideration for Dick Smith Holdings Ltd is that the consumers assess the alternatives in respect of the functions and psychological advantage which a brand could offer (Armstrong et al., 2015). Consumers under this stage are usually influenced by their attitudes along with the extent of involvement they might have with the product or brand. Ultimately, it is necessary for Dick Smith Holdings Ltd to effectively examine the value of the products in their evoked set before moving towards the next step in decision making. Dick Smith Holdings Ltd being the marketing organization, to improvement the chances of their brand recognition it is their part to evoke the set for several consumers. The company needs to understand what benefits the consumers are seeking and particularly the sort of attributes that would form an influence on the decision making process (Loveland, 2015). It is noteworthy to denote that consumer examine the alternatives in respect of functional and psychological benefits which Dick Smith can offer. The company is also required to check the other brands that consumers considers as this will help in preparing the right attributes of meeting consumer demand with improved business cash flows. In the structure of working capital inventory occupies the most strategic position in the business enterprise. For Dick Smith Holdings Ltd inventory management would constitute a largest portion of the current assets and their business entries. In the era of working capital, the efficient control of inventory has surpassed most of the serious problems of inventory to the central mills as around two thirds of the current assets are blocked in the inventories (Wild, 2017). For Dick Smith Holdings Ltd is it natural that the inventory management would help in increasing the profit as maximization of profit is an essential part of the current assets. Management of inventories for Dick Smith Holdings Ltd: Inventories generally comprises of the stores for Dick Smith Holdings Ltd. The inventories not accounts most important aspects of the current assets but in the retail companies like Dick Smith Holdings Ltd it accounts 62% of the total current assets. The maintenance for Dick Smith Holdings Ltd constitutes blockage of funds and comprises of the interest and opportunity cost the company. The efforts have been made by the company to minimize the stock however for Dick Smith Holdings Ltd it requires considerable amount of inventory planning (Krajewski et al., 2015). This requires forecasting of demands for numerous forms of inputs and producing the required quantity of inputs that can be sole in the market. The management of Dick Smith Holdings Ltd faces the following inventory problems: Maintaining a large size of inventory for effective and smooth operation of sales Problems related to the maintenance of minimum possible inventory as the company faces higher cost of holding the inventory and opportunity cost relating to the funds invested in the business (Chaiyawantakee et al., 2015). There are problems related to the control of inventories and keeping the balance at optimum level. The inventory management for Dick Smith Holdings Ltd must strike balance amid the higher inventory and lower inventory. The effective management end effective techniques of inventor control would help attaining a better results in operations and lowering the working capital (Chen Shi, 2017). Therefore, the inventory would result in significant influence on the profitability of Dick Smith Holdings Ltd. Proposed inventory control techniques for Dick Smith Holdings Ltd: The ABC method of inventory control is based on the principles that a small portion of any items might typically represent a bulk inflow of cash from the value of the total inventory used during the process of production (Jacobs et al., 2014). For Dick Smith Holdings Ltd there are relatively large number of items that might account for a small portion of their money value of stores. The money for Dick Smith can be ascertained by multiplying the quantity of the material of each item by the price per unit. With the help of this approach inventory control Dick Smith Holdings Ltd can control the items that has higher value than the items having lower value. Dick Smith Holdings Ltd can assign the inventory by giving A, B or C category based on the expenses incurred for a particular item. Following the classification of items rakings can be made based on the percentage of the total value of the percentage of the items distinguished (Stadtler, 2015). This would make sure that Dick Smith Holdings Ltd have a closer and strict control over the items. Either by the higher level management of the Dick Smith Holdings Ltd or by the materials department can set down the norms relating to inventories. The top management of Dick Smith Holdings Ltd would be able to set down the restrictions for the venture in the inventories. The materials department would be required to allocate the investment to several items and make sure that a smooth operations is conducted (Laudon Laudon, 2016). It is further recommended that the management of Dick Smith Holdings Ltd should set down the norms of the inventories. The minimum level of inventories relating to the reorder level might be determined to certain items of inventories for Dick Smith Holdings Ltd. A fluctuations in the lead time has been noticed with lower rate of inventory consumptions (Groover, 2016). As evident in the case of uncertainty the probabilistic approach for Dick Smith Holdings Ltd can be applied as this would help in defining the margin of safety. To circumvent the situation of out of stock Dick Smith can carry a minimum level of inventories with safety stock. Re-order and Economic Order Quantity: The quantity that is ordered when the stock of item is falls constitutes a re-order level. The inventory department should be such that minimum quantity and the maximum level must not exceed (Jacobs et al., 2014). The management may determine the economic order quantity that would result in lowest total cost of ordering and carrying cost of a particular item for inventory of Dick Smith. Recommendations: A recommendations can be asserted following the analysis of both the alternatives; On analysing the cash flow under the consumer demand process it is noticed that company could generated positive inflow of cash with improved sales growth. While under the inventory control technique there is higher inflow of cash with lower ordering and carrying costs. The management of Dick Smith Holdings Ltd are recommended to follow the techniques of inventory control as increased consumer demand would require appropriate management of inventory and sufficient margin of safety. Under inventory management method there would be lower cost of ordering and carrying cost with improved profitability. Conclusion: On a conclusive note, upon the analysis of both the alternatives it is understood that Dick Smith Holdings Ltd should follow the inventory control method as this would yield the company a better improved profitability with lower carrying cost for the items of inventory. 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