IWC RONA Assignment
Situation
Windows installed where there are risks of hurricanes, tornados, and other forms of wind damage must meet certain strength requirements. Unfortunately, these requirements involve thicker, heavier, and more expensive reinforced glass. Given the nature of this glass, there are also limits on the size and shapes of the windows that can be made with it. For window companies (like IWC, the custom window company discussed in class) these window strength requirements sometimes limit the types of windows it can design and install in commercial buildings constructed in wind-prone areas.
Your company, WinSafe, has developed a film that can be applied to regular glass allowing it to meet window strength requirements. Rather than buying the heavy reinforced glass required in wind-prone areas, along with specialized framing materials and related hardware, custom window companies can purchase the film, apply it to regular glass, use their regular framing materials and hardware, and fulfill customers' (generally commercial building contractors) structural and window strength requirements. There is no difference in visibility with the film. Given that regular glass is lighter and the film can cover the largest sheets, window companies do not face the same design and installation limits they would with regular wind-resistant glass. This flexibility allows them to install a greater variety of window shapes and sizes in wind-prone areas. Though there is a cost to the film, it is offset by savings on the more expensive wind-resistant glass. There is minimal equipment required to apply the film, though there might be a minor impact on the window company's fixed assets due to the purchase of this equipment.
IWC's current financials appear below. Since it does a fair amount of work on the hurricane-prone east coast and in "tornado alley" in the Midwest, wind resistant windows make up about 35% of IWC's business. Similar businesses have shown that switching to the film yields a saving of about 8% (savings on no longer using the more expensive wind-resistant glass netted against the cost of the film). Total inventory savings (window companies no longer need to stock wind resistant glass in addition to regular glass, nor the framing materials and other accessories needed with the heavier glass) range from 1 to 3% depending on the window company's inventory systems.
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Revenue
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$4,516
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Cost of goods sold (materials and labor)
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3,523
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Inventory
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723
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Total expenses
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971
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Fixed assets
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1,942
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Accounts receivable
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392
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Other current assets
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758
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Assignment
In Excel:
Create a RONA spreadsheet using the format used in class using IWC's financials above as a baseline.
Copy your RONA spreadsheet in a new tab (be sure to label your tabs!) and demonstrate the impact of IWC's savings on the wind-resistant windows portion of their business.
Copy your baseline RONA spreadsheet and create a third spreadsheet demonstrating the impact of the lower inventory costs only on the wind-resistant portion of IWC's business.
Finally, create a fourth spreadsheet reflecting the combined results of the cost and inventory savings on IWC's RONA.
In a separate Word document, answer the following questions:
What are the implications of these analyses for IWC? How would you use the RONA results in marketing WinSafe's film to IWC?
Where else do you see a potential RONA impact in IWC's switch to the film? Be specific about how IWC could save money (like the class exercise, "reduce cost of goods sold," without explaining how won't cut it). Where would you reflect this impact on the RONA spreadsheet?
What do you think the result would be? How would you use this result? (Hint: You may wish to put some "dummy" numbers into your IWC spreadsheet to see what the impact of any other proposed changes would be.)
Format
This assignment will be submitted to Blackboard in two pieces: your Excel spreadsheet with tabs for each part of question 1 (note that this must be a "working" spreadsheet with formulas in the cells wherever possible-no credit will be given for a spreadsheet used like a word processor with numbers only in the cells), and a Word document with your answers to both parts of question 2. Your Word document should not be longer than two pages.
Attachment:- rona.rar