You have Rs 5 crore of capital for the year across a 60-store chain. Options: (A) refurbish the 8 oldest stores at Rs 40 lakh each; refurbished stores have historically lifted sales 12% for two years. (B) install self-checkout in the 20 busiest stores at Rs 12 lakh each, saving 1.5 staff per store at Rs 3 lakh a year each. (C) open two new stores at Rs 1.2 crore each, each expected to do Rs 4 crore revenue at 6% store margin. (D) a chain-wide inventory system at Rs 1.5 crore, projected to cut stockouts from 7% to 3%.
Set your criteria, evaluate the options with the figures given, commit to an allocation, and say what you are not funding and why.
100 points, 60% to pass.
The arithmetic is the work here and most answers skip it. A: Rs 3.2 crore for a 12% lift on eight stores. B: Rs 2.4 crore saving Rs 4.5 lakh a year per store, so roughly Rs 90 lakh a year against Rs 2.4 crore — under three years' payback. C: Rs 2.4 crore for Rs 48 lakh of annual store margin, a five-year payback before overheads. D: Rs 1.5 crore for a four-point stockout improvement whose revenue effect has to be estimated, and which benefits all 60 stores rather than a handful. Strong answers rank by return per rupee and say what they assumed to make D comparable, since it is the only option whose benefit is not given in money.