A feasibility study for Grott Video
This piece of work is essentially a feasibility study for Grott Video. Grott Video is a relatively small firm consisting of 3 shops. Jean-Luc Picard is the name of the owner. Jean is currently in the process of deciding how best to increase shop efficiency as well as whether an installation of I. T. facilities would be beneficial to the way it works. Within this work you will find a detailed list of problems facing Jean and his staff followed by an equally detailed list of solutions provided by myself.
Next you will find calculations and explanations illustrating which, of 3 methods, would be best chosen by Grott Video if they decide to implement the computer system. These calculations are taken from the investment appraisal and consist of Net Present Value, Payback Period and the Average Rate of Return. After this you will find a section on project planning before the whole piece is rounded off with some considered recommendations. Problems:
Since there are only three shops, and a staff number so small that the manager is often called upon himself in busy times, Jean-Luc Picard is able to closely monitor any problems experienced on the shop-floor as well as up in his office. This knowledge is clear to see from the detailed and quantitative information given by Jean in the case study. These problems are: Initially I feel Jean should alter the membership rules enabling under 18’s to join. Once a customer has chosen a video the employee checks in the card index file to see if there are any outstanding payments due.
This is time-consuming. A slip is filled in for each loan and stored until after closing when it is copied on to the members card index file. This too is inefficient. The hire slips are inspected once on a Monday and then discarded. I feel it would be beneficial to have this information at hand in case of any disputes or irregularities involving a member. The tapes are returned to a ‘returns box’ inside the shop. This means members can only return videos when the shop is open and not all people find this convenient. Nowadays there is scarce demand to rent a VCR. Research carried out in Blockbuster
Video and Global Video shows they do not even bother to offer this service, as they know there is no demand. VCR’s are also rapidly losing their residual value with the ever-increasing popularity of DVD players. Grott Video are also not maximising their repertoire as some competitors are. Branching out into closely related fields could well see profits soar as has happened at places like Blockbuster. Money could also be gained through selling refreshments to those about to spend a night in. Having to constantly refer to a weekly changing Band Rate List every time somebody brings a late tape is also inefficient.
Each shop generates two reports a week showing unreturned tapes and their subsequent charges. This could be increased to improve efficiency in this area. Items not returned after two weeks are forwarded to a collection agency and a report is filed with the County Court. This manual system could also be improved. A manager has underlined the need for an improved system because of the amount of sales lost when videos are presumed out but are actually in the drop box. The same manager also pointed out that the card index file was slowing operations down as only one person could access it at a time, plus some staff writing was illegible.
Another problem identified was that of parking. Customers have even complained about insufficient space at shops 1 and 3. Jean has also said he feels doesn’t have adequate access to customer data for him to efficiently extract the information he requires to help him increase business. Another problem has been security, gang members have recently been able to infiltrate all 3 shops and flee with thousands of pounds worth of goods due to the current lack of communication between shops. Finally, Jean wanted some systems to increase his awareness of the financial position with relevance to these new I.
T. ideas. Solutions: Once all the problems have been identified, Jean has the 3 generic system options of a) Do nothing b) Change part of it c) Change all of it If he chooses option b) or c) the following may be of use: By discarding with the need for credit cards anyone would be eligible for membership. Alternative identification could be a passport, driving licence or National Insurance card. For those under 16 wishing to apply a letter could be sent home supplying the pin number of the child’s new account.
This would ensure the member is who they claim to be and, more importantly for when billing, live where they claim to live. The whole process of using a credit card for registration is both time-consuming and needless. By using a computer system and swipe machine Grott Video could make all information on a member appear on the screen in front of them with one swipe of a membership card. Any information on a forthcoming hire could then be efficiently inserted and logged into the systems database, without having to stay behind after closing.
Rather than discarding hire slips, a computer system would allow Grott Video to keep all the data stored safely. This data could then be used to answer any queries or simply to provide records of how busy the shop was, etc. By introducing an outside ‘drop box’ as used by Blockbuster Video, Grott Video would give customers the option of a 24-hour delivery point. This would undoubtedly see a decrease in late arrivals and lost tapes, saving time and money chasing up debtors. Grott Video should sell their VCR’s and use the money to help pay for the substantial capital spend envisaged with the introduction of computerisation.