EssaysForStudent.com - Free Essays, Term Papers & Book Notes
Search

Labor Allocation

By:   •  Research Paper  •  697 Words  •  November 9, 2009  •  912 Views

Page 1 of 3

Essay title: Labor Allocation

Labor Allocation for Blockbuster

RES/341

January 15, 2002

Abstract

No consideration has been given to the changes in revenue resulting from the rollout of Blockbuster’s (Blockbuster) Movie Value Pass (MVP). Since the allocation of labor for all stores is based on revenue, it is important to examine the effects to the revenue stream and invoice comparisons. With an Excel spreadsheet the impact of the new program on revenue, the average invoice total, invoices and the current labor matrix were examined over an eight week span. The issue, data collection and results are discussed.

Labor Allocation for Blockbuster

The Issue

The changes in the video rental industry have been looming for more than a decade. Promises of Video on Demaand (VoD) delivered directly to anyone’s home computer (Cook, 2004, par. 6). Also, the increasingly popular NetFlix, DVD by mail, successfully disrupted the market in 1999 (Aaron, 2004, par. 6). As these changes have begun, so have the changes with the “brick and mortar” segment of the industry.

Blockbuster, Blockbuster, Inc. and others have been experimenting with frequent renter programs. The struggle within Blockbuster is not over revenue or average ticket, it is over invoice comps (comparable store increases/decreases). Over the past two years Blockbuster has seen invoice comps go down steadily. Using figures from a local store invoice comps have gone down about eight percent from August 2002 to August 2004. However, average invoice revenues had gone up twenty-one percent.

Now, Blockbuster is having to compete against NetFlix and Blockbuster’s movie rental programs: one price rent all you want. So, Blockbuster designed the Movie Value Pass (MVP). The purpose of the MVP program is to increase invoice comps within the stores. There is success with the invoice comps, but labor is suffering from that increase. Revenue is not keeping pace with the increase in traffic. Ultimately, the labor allocation program will have to be overhauled in order to make sense with the changes in the revenue stream.

Data Collection

Eight weeks of data was collected for comparison. The four weeks prior to the start of the MVP and the four weeks after the introduction of the MVP. The daily revenue and invoice totals were collected for each period to see the change in revenue against the change in invoices. A graph was also plotted for each so that the change could be clearly seen. The final piece of information that was necessary was the Labor Matrix established by Blockbuster for the amount of labor allocated to each store based on the revenue.

Year 2004 4 Weeks Before MVP 4 Weeks After MVP

Days Revenue Invoices Revenue Invoices

1 $9.12 243 $8.85 193

2 $7.98 169 $10.14 93

3 $9.31 322 $8.81 208

4 $9.32 211 $9.22 138

5 $8.90 209 $11.29 171

6 $10.28 350 $10.38 369

7 $9.57 409 $10.55 428

8 $9.62 275 $9.94 353

9 $9.75 178 $9.50 218

10 $8.35 240 $6.96 220

11 $9.30 158 $6.30 155

12 $10.38 152 $5.66 208

13 $10.16 382 $8.05 456

14 $10.14 414 $5.61 544

15 $10.14 189 $6.47 285

16 $9.92 130 $5.01 180

Continue for 2 more pages »  •  Join now to read essay Labor Allocation and other term papers or research documents
Download as (for upgraded members)
txt
pdf
Citation Generator

(2009, 11). Labor Allocation. EssaysForStudent.com. Retrieved 11, 2009, from https://www.essaysforstudent.com/essays/Labor-Allocation/3092.html

"Labor Allocation" EssaysForStudent.com. 11 2009. 2009. 11 2009 <https://www.essaysforstudent.com/essays/Labor-Allocation/3092.html>.

"Labor Allocation." EssaysForStudent.com. EssaysForStudent.com, 11 2009. Web. 11 2009. <https://www.essaysforstudent.com/essays/Labor-Allocation/3092.html>.

"Labor Allocation." EssaysForStudent.com. 11, 2009. Accessed 11, 2009. https://www.essaysforstudent.com/essays/Labor-Allocation/3092.html.