Stuart Daw Case

Your case submission must be typed up in either Word or Excel and uploaded to the Brightspace assignment drop$-$box before $11$:$59$pm on Feb. $5.$ Only one copy needs to be uploaded on Brightspace per group, and please indicate the names and student numbers of all students on the front page of your case submission. The case is available for download on Brightspace through the ARES Reserves portal $($Go to $$Tools$$ and in dropdown menu click $$ARES Reserves$)$ on May $30$

Due Date: June $10,11$:$59$PM

Total Marks: $50$ marks

Format of Submission: $($Max$.10$ Pages $1\mathrm{.}5$ line spacing, $11$ pt$.$ Times Roman$)$

a$)1-$Page Executive Summary

b$)$ Answer Questions $$ Be specific in answering the questions $($link results together to demonstrate integration of knowledge if applicable$)$

c$)$ Upload to Dropbox $($Case Folder$)$ on Brightspace.

Questions:

$1.$ Use the current pricing method to show the calculation of how the current cost of $$16\mathrm{.}20$ per kit was determined. Now, using the principles of Activity Based Costing, estimate the cost of the two customers provided in the case. Determine the selling price per kit or per cup for each customer under this approach? $(15$ marks$)$

$2.$ What is Stuart Daw$$s primary business level strategy? Provide support as to why it is either low$-$cost leadership, differentiation or niche? $[5$ marks$]$

$3.$ Do you expect that there would be a change in the customer mix as a result of moving to Activity Based Costing? Why or why not? $[5$ marks$]$

$4.$ Stuart gets a call from a convention in downtown Toronto across the street from their current offices. The convention last $4$ days. The organizer anticipates they will need $50$ coffee kits as well renting the brewing equipment for $$150$ for the $4$ days. If the convention offers $$1,300$ for the order and Stuart wants to make a $25\%$ return, should he accept the order? Why or why not? What other considerations should Stuart make before accepting$/$rejecting the offer? $[10$ marks$]$

$5.$ As a consultant to Stuart Daw, what other considerations or recommendations would you suggest Stuart to look into or offer? Provide an implementation timeline of any changes you would recommend. $[15$ marks$]$