Birlin Toyota case

Berlin Toyota Case Study Author Name Institution Affiliation After assuming the same gross profit rate as $10.6 percent and target profit as $1,300 for every vehicle, we calculated the maximum trade-in allowance in Mr. Bogard’s initial negotiation with the customer in the following way. List price = $30000 Approximate cost = 26820 Gross profit = (3180) Additional profit = 1300 ACV of trade-in = (7200) Need to realize = 28120 Difference = 20920 List = 30000 Maximum allowance = $9080 According to my observations, the standard maintained regarding the price of labor is quite confusing and the main problem is that customers mostly calculate the minimum labor price and do not care about the exact price of parts of the vehicle, which seems to be out of their range and this is why the service department has to face consequences. It is not good for the company, so the only way to solve the problem is to mention the actual price of parts of the vehicle before finalizing a deal. The service department’s Mr. Berry and Mr. Rounds are not happy with the current interdepartmental pricing system. They can take initiatives in this regard and should tell customers everything about the actual amount of the vehicle by including the service charges etc. There is no need to hide anything. People working in the service department might have to bear the necessary costs if they do not clarify things initially. They won’t have to spend anything on the maintenance of vehicles if they begin charging customers extra amount. The service department charges its customers in four ways: customer pays, internal, warranty work and extended work. In reality, what customers pay does not come under this category, meaning the service department has nothing to do with what the clients are being charged. I think that the head should come to the sales department once a while in order to get a proper amount from the clients. In addition, the insurance department should take into consideration all service charges especially the amount to be paid in the form of warranty, as the service de...