Bkal 3063: Case Study on Waji Boutique

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SCHOOL OF ACCOUNTANCY

COLLEGE OF BUSINESS

BKAL3063 INTEGRATED CASE STUDY

FIRST SEMESTER 2015/2016 (A151)

 GROUP: I

CASE STUDY

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PREPARED FOR:

DR AHMAD BELLO

PREPARED BY:

TAN CAI YING                                                 221419

NABILAH BINTI MOHD SALLEH                                 221941

NURUL AFIFAH BINTI SHARSHAM                        221966

FARAH FAIZATUL AKMAR BINTI AHMAD FUAD         222002

HUWAIDA BINTI AMINNURDDIN                         222038

Contents

1.0 Synopsis        

2.0 Introduction        

3.0 Main Body        

3.1 Sour experience of Woji Boutique        

3.2 Inventory management policy        

3.3 Pricing Strategy        

3.4 Hiring employee        

3.5 Fraud        

3.6 Promotion strategy        

3.7 Break-even point        

4.0 Conclusion        

6.0 References        

1.0 Synopsis

Mr. Bashir Ahmed is a retired IT Consultant, run-up a small company that called as a Waji Boutique. Mr Bashir had no experience in the business industry and he did not have any ideas on how to manage the business. He does more searching online for information, interviewed and made a layout to setting up the Boutique. At the early of business, Mr. Bashir faces the problem to get customer. After get some suggested from other people, he follow the advising and surprisingly it show improvement in sales as well as increasing in customer. Then he decides to hire the employee who could handle all aspects of the business and found out that Khawar fit the spot.

His business was slowly nudging towards break-even and everything was running smoothly, so he thought. After several months, Khawar left work without prior notice. Mr. Bashir decided to sit at the shop himself. For the next three weeks he sat at the boutique and got to know all the fraudulent activities and deceptive tactics Khawar had been using right under his nose. Mr Bashir is looking for the procedures and tactics to avoid the wrong doing activities. The major issue facing by Mr. Bashir is inventory mismanagement, account manipulation and hidden loans on company accounts. All these issue arise due to its own the only one employee, Khawar. With the inventory mismanaged, discrepant accounts and loans on business Mr Bashir was sitting at the boutique and thinking how best to tackle the current situation and what procedures and checks should he implement in order to avoid such wrong doings.

2.0 Introduction

There are several problems faced by the owner of the company. The first problem is inventory mismanagement. The problem comes when their sales are very bad in the first three months of its operation. Besides, Mr Bashir had devised a two tag system for managing inventory. Mr Bashir randomly storing products in inventory, it caused transferring in and out of inventory could not occur smoothly.

The second issue that Mr. Bashir faced is about the pricing policy and source of the product. He got the dresses and then simply doubled the price of each outfit for sale purpose. Many customers would come in to look at the outfit but walk away without make any purchase because the price is too expensive. At the second month, Mr. Bashir added half of the cost as the profit margin. Even though Mr. Bashir lower the price but the sale becomes worse than the first month.

The third problem faces by Waji boutique is hiring employee. Mr Bashir straightly chooses Khawar as his sales assistant after recommended by his gardener without making any proper process in recruit Khawar to be his sales assistant. Mr Bashir only realize that Khawar is not a responsible person and making fraud after Khawar leave Mr Bashir’s boutique with many problem.

The next issues that happen in Waji Boutique are fraud by his employee. Mr Bashir got to know all the fraud activities by Khawar. Khawar takes advantange of the kindness of his employer and works with do something wrong as salesman or employee. Firstly, Khawar had bought his clothes from neighboring shops on company’s account and loaned money from them. Beside, Khawar also bring a separate stand of ladies accessories and put it in front of the shop This happened because Mr Bashir rarely come to boutique.

For the last issue is about facing problem to get customer. Although there are many customers would come and look at the clothes but almost all of them walked away without making a purchase. Mr. Bashir faced that problem because he has no marketing and promotion strategy to promote the product and attract customers to buy the items. Waji Boutique should have a promotion or marketing strategy to promote the product to customers.

3.0 Main Body

3.1 Sour experience of Woji Boutique

The constitutes to Woji Boutique sour experience are there are no proper way for inventory management, hunching for pricing policy, hired employees without an official way, improper delegation of authority and the owner of Woji Boutique always follow people words.

1. No proper way for inventory management

Mr Bashir had devised a two tag system for managing inventory. He made 2 tags for every outfit; one he put up on the dress at the outlet with sales price on, another he kept at home and wrote details of the outfit which include description, cost price, sale price and date of purchase on it. Without a proper way for inventory management, Mr Bashir found out that the inventory items didn’t match the records.

1. Hunch in pricing policy

In the first month, Mr Bashir simply doubled the price of each outfit and put it up for sale. For the second month, he added half the cost of an outfit as profit margin. By implementing hunch in pricing policy, Mr Bashir could not make any profits.