Do the Qualitative and quantitative analysis in this.

After receiving advice from you regarding his cash concerns, Pete has come to you for advice on three ideas he has for improving his business. First, a supplier has suggested he purchase a new inventory management software system to replace his old one, that would help reduce his cost of goods sold to 55% of sales. Pete is intrigued but concerned because of the cost of the system. To alleviate his concerns, the supplier has offered to lease the system to him as well as provide ongoing training and support for $4,200 per year. He thinks that this might be a good idea for the business but is wondering at what level of sales volume it would make sense to switch from his old system; that is, at what level he'd be more profitable.

Pete is also considering ways to increase his sales, but he would like to look at this option independent of the decision on the machinery. Although he originally decided to stop spending money on marketing, he is toying with the idea of instead increasing his advertising budget by $5,000 to bring customers into the store. He is considering combining this with lower prices and an incentive commission for his employees to further increase sales. His average price per product sold is $3, but he's considering lowering that by 5%, and he thinks a 1 cent commission to his sales staff on each product sold would increase both sales and customer service. Pete projects that this will increase the number of products he sells on average by 10%. Again, he is looking to you for advice to determine if this will be profitable for him.

Lastly, Pete is considering adding a grocery delivery service to add an additional revenue stream and expand his customer base. This delivery service would target university students who live in the area near Pete's store. Pete knows that these students have busy lives and many do not own cars, making it difficult for them to purchase groceries. Pete estimates that he could service 5% of the city's 12,000 students, and that having a delivery service would triple the $50 per month that these students spend on average in his store for the 8 months they are on campus each school year.

In order to launch this service, Pete must lease two delivery vans at annual cost of $21,500 per van. Pete estimates that maintenance on these vehicles will cost $3,000/year in total. Two new employees will have to be hired to drive these vans, and each will be paid an annual salary of $42,000. Creating and maintaining the order system will cost $18,000 per year. Since Pete will have to hire workers to fill the orders, the VCRR will increase by 15%. In order to connect with the students and to make them aware of this service, Pete will be creating Facebook ads as well as distributing flyers at the local universities. Based on Pete's current marketing plan, he believes he will need to spend an extra $10,000 each year to ensure each and every student knows about his business idea.

While Pete is excited about this opportunity to expand his business, he would like your opinion on whether or not it is a smart decision, is it something that will make him more profitable. He is also wondering how he should charge the students a percentage of the grocery bill or a flat fee per order, and how much he should charge, if at all. Conduct any calculations you believe will aid in your recommendation to Pete.