3.5 points Save Answer A Repair Order in service or the body shop should always have O Acceptance, offer, and consideration O Complaint, cause, and correction O Time, value, and money O Prior approval from the manufacturer QUESTION 2 3.5 points Save Answer What does gross turns measure? O How well the parts department is turning its stock inventory O How well the parts department is turning its dollar value of inventory O How much of the fixed overhead the parts department is covering O How productive individual parts counter people areThe Economic Order Quantityr is C:- The most efficient number of items of inventory a parts manager should order -:I__:- An incentive given to the dealer by the manufacturer for ordering in bulk -::__:- A reduction in total average costs by producing more items -::__:- Measures the time it takes to receive a part from the manufacturer QUESTION 4 3.5 points Save Answer Labor is inventoried when and cleared from inventory when '12-} The RO is opened: tech is paid {'22- The customer makes an appointment; the R0 is opened {'3- The dealership is paid; the technician is paid {:2- The RO is opened; the R0 is closed QUESTION 5 3.5 points Save Answer Think carefully about what techinican productivity is. Which of these actions will make a technician more PRODUCTIVE? O The tech gets more training O The dealership runs a successful marketing campaign to get more customers O The dispatcher gives a tech easier work O The dealership hires more technicians to a poorly performing service department QUESTION 6 3.5 points Save Answer Dealerships can increase their absorption percentage by undertaking all of the following actions EXCEPT... O Sell more vehicles O Cut expenses O Sell more hours Increase parts deparment internal gross profitsQUESTION 7 3.5 points Save Answer The recording of lost sales in the Parts Deparment will... O Help lower obsolete parts O Accelerate the phase in time period for stocking a part O Do nothing because lost sales should not be recorded Increase the dealership's gross profit percentage QUESTION 8 3.5 points Save Answer Frozen capital is.. O Parts which need to be stocked in cold rooms O Not very costly to dealership O Has both a direct and indirectly negatvie impact on a dealerhip's profits O Only impacts the service deparment of a dealershipQUESTION 9 Which ratio measures the money earned on just the sale of the inventory item? O Asset Turnover O Current ratio O Net Profit Margin O Gross Profit Margin QUESTION 10 The number 1 source of parts obsolescence in the dealership is... O Too many people O High costs QUEST O Special order parts O Manufacturer delays QUESThe following information comes from a real dealership in North Carolina. This dealership asked me to do some consulting forthem a couple of years ago. Below you will nd an AVERAGE MONTH Balance Sheet and Income Statement {pertinent information only]. Please answer the questions below. 1. 2. Calculate all the ratios highlighted in yellow. [2 points each = 24 total) The service department is losing money. The service manager feels he can't raise prices because r\"competition is tough\". You do some research and 'find that your effective labor rate is in the middle of other dealers and independent dealers in the area. The service manager blames the techs and their poor prociency for some ofthe production issues. The dealership is open M-F 8:00am-5:00pm and not open on the weekend. Look at the key service numbers and tell the dealer what you see as the problem[s] [what is causing the big loss) and what you can do to fix it. Think about some of the issues we discussed on why customer stop using dealerships service. [3 points] . The parts department is actually one of the bright spots in the dealership. There is only one real problem in this department. Identify it and state some things you can do to x it. (6 points] .The company has a cash ow problem. Actual cash levels are under the NADA guide. Discuss the concept otfrozen capital and howthis effects cash ow. [5 points] . Absorption is a fixed operations ratio: however, it effects so much more. Discuss what the absorption ratio is and hour having a high absorption can impact the selling strategies ofthe variable operations. [5 points] Accounts Receivable $300,000 | Accrued Payroll $150,000 New Car Inventory $7 500,000 | Floor Plan Payable $7.500,000 Used Car Inventory $1.100,000 Long-Term Debt 32.975,000 Parts Inventory $250,000 Equity $3.200,000 Work in Process $150,000 Current Asset: 39.575,000 Fixed Assets 35.350,000 Total Asset: $14 925,000 Total Liability & Equity $14.925.000 Tota New Car Used Car Service Parts Sales $4,311.400 $3,200,000 3700,000 $187.000 $224.400 Gross Profit 3878,140 $300,000 $150,000 $127,160 $100.980 Variable Expense 690,000 360,000 $30,000 30 Personnel Expense 5271,256 $120,000 380,000.0 350.864 $40.302 Semi-Fixed Expense $160,147 $60,000 $25,000 $60,000 $15.147 Fixed Expense $150,000 549,500 530,000 $40.500 $21,000 Total Expense 6571.403 5280,500 $145,000 $160,364 $78.530 Net Profit 38.737 $10,500 $5,000 $33 204 $24.441 Service Numbers Parts Numbers Overall Service Gross Margin 68.00% Parts Gross Margin 45.00% Absorption Accounts Receivable Customer Fro Service Net Margin -17.76% Parts Net Margin 15.26% zen Capital Workdays per Month 20.25 Lost Sales 30.500 Actual Hours /Day per Emergency Tech 6 Purchases $7.500 Available Hours/Day per Monthly Stock Tech Purchases $115,000 Operation Hours/Day per Tech 8.5 |Parts Month Supply 2.03 Productivity Frozen Parts Capital Efficiency Total Demand Proficiency 108.25% | Parts Level of Service Current Number of Techs 8 Parts Gross Turn Effective Labor Rate $125 | Parts True Turn Service Sales to Break- Even Service Technician Value Service Technicians NeedQUESTION 12 16 points Save Answer Many service managers look at the service write-up process just as a way to sell hours and make money. This is the "what" we do. We discussed the "why" we do things. Think about the concpet as you answer the two shoret answer questions below. 1. Writing a good RO is imporant as is selling work, but explain what the most important thing a service advisor should be doing when he or she is with a customer. Explain how this helps with building loyalty and retention. (8 points) 2. Why is earning customer loyalty so much more important than just satisfying a customer. (8 points) For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph V Arial 10pt V E V A V V E E x2 X2 + ABC V V X EX: (> T (?) + P 0 WORDS POWERED BY TINY