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Raven's Sun Enterprise Ltd.
Case 9 90 2015 001
Case published in the International Journal of Case Studies in Management, Vol. 13, No. 4
Languages
:
- English
Keywords:
- Margin of safety,
- CVP analysis,
- Work life balance
Year of production
:
2015
Registration date
:
2015-11-20
Teaching notes included
:
Yes
Abstract
Raven’s Sun Enterprise Ltd. is a small oilfield and construction site delivery business operated by firefighter Mike LaPlante on his days off. Mike is the firm’s only driver, so scheduling his time profitably is the critical success factor. Students will have to consider an unusual measure of volume, Mike’s available work days, to assess potential profitability and risk during a recession. They will have to apply constrained resource analysis and cost-volume-profit analysis (CVP) to three different sales mixes, which in this service business involve combinations of in-city and long-haul deliveries. Finally, their recommendations will relate the CVP analysis to work/family balance and safety issues.
Primary domain
:
Accounting
Secondary domain
:
Not available
Sectors
:
- Transportation and warehousing
Type
:
Traditional case (Decision-making case)
Type of data used in the production of the case
:
Factual data that is not public wherein the identity of the company/person is disclosed
Event location
:
Calgary, Alberta, Canada
Year of start of the event
:
2014
Year the event ended
:
Not available
Business size
:
Self-employed worker
Main themes covered
- Cost volume profit and risk analysis
- Work life balance issues
Teaching objectives
- Illustrate the relevance of CVP analysis to entrepreneurs in a service industry.
- Illustrate a creative application of CVP analysis, specifically an original choice of volume: work days per month.
- Encourage students to think about how CVP analysis is related to work/life balance, whether an expected financial return is enough to justify continued investment in a small family business, and safety considerations. Risk calculations become more meaningful in this context.
Concepts and theories related to the case
- Cost volume profit analysis
- Risk assessment through margin of safety calculations
- Constrained resource analysis
- Work life balance issues