Problem:
You have been asked to apply your decision-making skills and analysis to the merchandising of JTI's travel product stores. Much of the floor display space is taken up by the innovations department which contains highly successful innovative products such as luggage with a built-in compression valve and a tool to reduce most air space taken up by packed items. Because of competitor store offerings, JTI leadership is considering eliminating the camping equipment department and using that space to further expand the innovations department. JTI has requested that your team evaluate the impact of this decision. Discuss the type of accounting quantitative data you will need to evaluate this decision.
Scenario:
You have been hired as a consultant for JetSet Travel, Inc. (JTI), a company which develops, manufactures, and sells a wide range of travel-related equipment and products.
The company expanded its luggage production this year and invested much of its manufacturing funds into the initial manufacture of a lightweight, yet durable line of luggage. JetSet Travel put many of its research, development, and marketing dollars this year into a breakthrough over- the-counter tablet which prevents jet lag for 98% of adult users.
You were hired to provide the analysis and advice which will help the upper level management make critical decisions to reduce costs and increase profit. In the following months, you will use your accounting skills to assist company leaders by projecting profits, focusing product lines, providing capital budgeting analysis, and making recommendations for containing costs.