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The following appeared in a memorandum from the owner of Movies Galore, a chain of
video rental stores.
“In order to reverse the recent decline in our profits, we must reduce operating expenses at
Movies Galore’s ten video rental stores. Since we are famous for our special bargains, raising
our rental prices is not a viable way to improve profits. Last month our store in downtown
Marston significantly decreased its operating expenses by closing at 6:00 P.M. rather than
9:00 P.M. and by reducing its stock by eliminating all movies released more than five years
ago. Therefore, in order to increase profits without jeopardizing our reputation for offering
great movies at low prices, we recommend implementing similar changes in our other nine
Movies Galore stores.”
Write a response in which you discuss what questions would need to be answered in order to
decide whether the recommendation is likely to have the predicted result. Be sure to explain
how the answers to these questions would help to evaluate the recommendation.


The recommendation provided cannot lead to the similar result which were achieved in Marston before the analysis and feasibility of the solution in different stores. As it may be true that by reducing the operating hours may not have affect in downtown but it might have a major impact on sales in town or other store locations. Furthermore, it is also required to analysis the interest of customer at different stores.

The main question which need a valid answer is whether the populace living near other stores are similar to the populace living near Marston. As it is said the store, Marston, is in downtime, the main high time for the store’s operation is before 6 pm but store in city may have high rush in the store between 6pm to 9pm as in cities most the customers are corporate people and buys after working hours. The nightlife of the store’s location may vary depending on the customers. The customer in Marston where able to adapt to the change in operating hours as time is not constrain for the people in Marston whereas in some other downtown stores people may not be able to go to store due to time constraint. If the answer to the question that the all stores have a rush time before 6 pm then reduction in operating expense may not be increase profit if the reason for the decline in profit is independent of the operating hours.

Another question which need a justified answer is that whether the interest of the people in all stores are alike, if not then the elimination of all movies released more than five years ago can not only help in increase of profit but may lead to decline in the profit for the stores. The customer of the store where the recommendation has been executed are more interested in the movies which are latest but it might be a possibility that the interest of the customer at other store may be more incline towards old movies. Nonetheless, a particular area might have more sales owing to a specific movie genes which have been released before 5 years. If this can be verified from the records that the sale of movies released in last 5 years is greater than earlier, it may be the case that the main reason for the decline profit is not dependent on the stock at all.

The recommendation has assumed that the reason for decline all 9 Movies Galore’s store is same as the one in Marston. Different stores can have different reason for the decline in profit. Operating hours and excessive store may not be a reason for decline in profit in other stores. There are many other factors needed to be considered. One integral factor is the quality of the product, may be the company to known for the great movies at cheap price but the quality of the movies is not satisfactory for the customer. Moreover, Quality is imperative then expense. Additionally, factor for decline in the profit is stock availability of a movies. Furthermore, location is an important factor. Nonetheless, the people are less interested in renting the movies than buying them. Moreover, the customers are more inclined towards the online rental where less equipment is required than cd or dvd of the movies.

The recommendation can considered to be achieve the predicated result if all these questions are answered and it may be answered if we analyses the last records of sales in the stores individually and also feedback from the people in the area where store is located as well as of the customer will help to achieve the goal.

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