Dirt Bikes Running Case

Introduction to Dirt Bikes

Dirt Bikes USA is a small company headquartered in Carbondale Colorado that manufactures and sells its own brand of off-road off-road motorcycles. It was founded in !!" to to  product dirt bikes that could be customi#ed for racin$ and off-road recreational ridin$ ridin$ usin$ the best quality components and parts parts from all o%er the world. &he company has continued to $row and now faces a new set of challen$es and opportunities. 'ou ha%e  been asked to ser%e as a consultant to apply your information systems knowled$e to help Dirt Bikes sol%e some of the problems it is encounterin$. &here is an assi$nment awaitin$ you to accompany each chapter of the (audon and (audon Management Information Systems te)t. In order to to complete the assi$nment* assi$nment* you should re%iew the correspondin$ te)t chapter and any information pro%ided by your instructor related to the topic you are in%esti$atin$. 'ou 'ou can complete each pro+ect indi%idually or in teams* dependin$ on your your instructor,s requirements. &o de%elop solutions* you may need to do eb research and to use spreadsheet* database* or eb eb  browser software tools* and you will need to use a word processor to write up your your findin$s. any pro+ects recommend you use electronic electronic presentation software* if  possible* to summari#e your findin$s for mana$ement. /ach assi$nment will list the software tools that you will need to use and the questions you will need to answer. In order to complete your assi$nments* you should familiari#e yourself with Dirt Bikes. &o learn more about the company and how it works* click on each of these topics0 1hyperlink2 Company 3istory and Back$round 1hyperlink2 4r$ani#ation Chart and /mployees 1hyperlink2 5roducts and Ser%ices 1hyperlink2 Sales and arketin$ arketin$ 1hyperlink2 Selected 6inancial Data &he followin$ is a list of Dirt Bikes pro+ects pro+ects for each chapter. &his list includes links to to the data files for these assi$nments. Chapter  Assi$nment0 Assi$nment0 Understandin$ Information Information System 7equirements [Dirt Bikes Org Chart] Chapter 8 Assi$nment0 Assi$nment0 Analy#in$ 6inancial 6inancial 5erformance [Dirt Bikes Financial Data] Chapter " Assi$nment0 Assi$nment0 Analy#in$ Competiti%e Competiti%e Strate$y Chapter 9 Assi$nment0 Assi$nment0 De%elopin$ a eb eb Site 5ri%acy 5olicy Chapter : Assi$nment0 Impro%in$ Decision akin$0 akin$ the 7ent %s. Buy Decision Decision for 3ardware and Software Chapter ; Assi$nment0 Assi$nment0 Impro%in$ Decision akin$0 7edesi$nin$ 7edesi$nin$ the Customer Database [MIS11Ch06 Customer Database] Chapter < Assi$nment0 Assi$nment0 Achie%in$ 4perational 4perational /)cellence0 Usin$ Internet &o &ools ols to Increase /fficiency and 5roducti%ity Chapter = Assi$nment0 Assi$nment0 Achie%in$ 4perational /)cellence0 /)cellence0 De%elopin$ a Disaster 7eco%ery 5lan Chapter ! Assi$nment0 Assi$nment0 Achie%in$ 4perational /)cellence0 /)cellence0 Identifyin$ Supply Chain ana$ement Solutions

Chapter > Assi$nment0 Achie%in$ 4perational /)cellence0 De%elopin$ an /-Commerce Strate$y Chapter  Assi$nment0 Achie%in$ 4perational /)cellence0 Identifyin$ 4pportunities for ?nowled$e ana$ement Chapter 8 Assi$nment0 Impro%in$ Decision akin$0 Analy#in$ the Impact of Component 5rice Chan$es [MIS11Ch1 Bill o! Materials] Chapter " Assi$nment0 Achie%in$ 4perational /)cellence0 Desi$nin$ an /mployee &rainin$ and Skills &rackin$ System and Database [MIS11Ch1" #m$lo%ee Database] Chapter 9 Assi$nment0 Impro%in$ Decision akin$0 Usin$ Spreadsheet Software to Analy#e the 7eturn on a @ew System In%estment Chapter : Assi$nment0 Achie%in$ 4perational /)cellence0 /)pandin$ International Sales. Com$an% &istor% and Background

Dirt Bikes USA was founded in !!" by Carl Schmidt and Ste%en c6adden* two youn$  but e)perienced bikers with en$ineerin$ back$rounds who saw that dirt bikes were  becomin$ %ery popular in the United States as both sportin$ and racin$ motorcycles. &hey de%eloped frames for dirt bikes that were more suited to off-road handlin$ and started usin$ these frames to build their own dirt bike models usin$ motorcycle en$ines manufactured by other companies* such as 3onda and 7ota) otors of Austria. 7idin$ on one of their customi#ed dirt bikes* Ste%en finished first in the famous Barstow to (as e$as race. &here was so much interest in Carl and Ste%e,s bikes that they decided to open a production facility that could manufacture lar$e numbers of their dirt bikes for the retail market. &hey opened a small production facility in Carbondale which has since e)panded to house 8> workers in%ol%ed in production* desi$n* and en$ineerin$ and a corporate sales and administrati%e staff of close to 8> employees. 4%er the years Dirt Bikes USA has enhanced and e)panded its product line to include dirt bike models optimi#ed for racin$ and for off-road recreational use. Its racin$ models ha%e placed well-and often placed first-- in the many dirt bike races sta$ed throu$hout the United States* includin$ the Barstow-(as e$as race and competitions at Daytona Bike eek. Organi'ation Chart and #m$lo%ees

Dirt Bikes USA is still pri%ately owned with Carl ser%in$ as C/4 and Ste%en as 5resident and Chief 4peratin$ 4fficer. About 8> employees work in desi$n* en$ineerin$ and  production* includin$ " full-time product desi$ners and " en$ineers. In addition to a 9 person 5arts department* Dirt Bikes maintains a ten-person ser%ice department to ser%ice warranties and customer problems with parts and motorcycle performance. 6i%e employees work in Dirt Bikes, shippin$ and recei%in$ department. Dirt Bikes, sales staff consists of a marketin$ mana$er and : sales representati%es* two for the est coast and estern United States* one for the idwest* one for the @ortheast and one for the South. &he corporate administrati%e staff consists of a controller* one accountant* one administrati%e assistant* two human resources staff members* three secretaries* and two information systems specialists to support systems ser%icin$ all of the business functional areas. Click here [Dirt Bikes Org Chart] to see Dirt Bikes, or$ani#ation chart.

&he company maintains a %ery friendly family atmosphere* encoura$in$ teamwork* attention to detail and quality* and continual learnin$ and inno%ation. /mployees* distributors* and retail customers are ur$ed to contribute ideas on how to impro%e Dirt Bikes, products and ser%ice. (roducts and Ser)ices

Dirt Bikes, founders reali#ed that the most popular dirt bikes were forei$n brands and wanted to capitali#e on their pro)imity to the dirt bikes racin$ circuit and market in the United States. Carl and Ste%e hoped they could de%elop bikes that performed and looked  better than the competition by usin$ the best custom parts a%ailable. Dirt Bikes does not hesitate to use quality components from all o%er the world. &he en$ines for Dirt Bikes are 7ota) en$ines from Austria and tires are from Dunlop* but many of their pa rts* such as shock absorbers* front wheel forks* e)haust pipes* and headli$hts* are from the United States. Dirt Bikes makes its own frames* shapin$ them to $i%e them the unique spirited style for which the company is noted. &he company,s parts and ser%ice business accounts for about : of its total re%enue. anufacturin$ and sellin$ dirt bikes is a comple) business. Dirt bike racin$ has many forms* includin$ racin$ specifically for different si#e bikes* for short distances* lon$ distance* and e%en for up to si) days. /nduro bikes are for cross-country racin$ and motocross bikes are specially desi$ned for racin$ in an enclosed dirt course that can consist of a %ariety of terrains uphill* downhill* corners* +umps* and so forth. Dirt Bikes currently produces four models0 the /nduro 8:>* the /nduro ::>* the oto ">> and the oto 9:>. &he two /nduros are endurance racers* while the otos are for motocross racin$. All four are %ery modern* with such technolo$y as both kick and electric starters* steerin$ stabili#ers* and liquid coolin$. &he lar$e ma+ority of these bikes are sold in the United States for between "*8:> and !>>> retail. E&he /nduro 8:> retails for "8:>* the /nduro ::> retails for <;>>* the oto ">> retails for 98!: and the oto 9:> retails for =!!:.F Dirt Bikes has appealed primarily to serious trail and /nduro riders* althou$h it is makin$ inroads into the motocross market.

Sales and Marketing

Dirt Bikes does not sell directly to retail customers* relyin$ on a network of 9> distributors concentrated in the estern and idwestern United States. A small  percenta$e of Dirt Bikes are sold in /urope usin$ independent distributors that sell other  brands of dirt bikes and motorcycles as well as Dirt Bikes. Dirt Bikes, motorcycles*  parts* and ser%ice* includin$ warranty repairs* can only be obtained throu$h an authori#ed Dirt Bikes dealer. All motorcycle and spare parts sales* shippin$ and set-up must be handled by a certified dealer. If a potential customer li%es more than :> miles from the nearest authori#ed Dirt Bikes dealer* the customer can purchase a Dirt Bike or Dirt Bike  parts throu$h a certified independent motorcycle dealer. 7etail customers can purchase

spare parts directly from Dirt Bikes only by %erifyin$ that they li%e more than :> miles from an authori#ed Dirt Bikes dealer. Dirt Bikes, sales department works closely with Dirt Bikes, distributors. 4ne of its key responsibilities is to a$$ressi%ely promote Dirt Bikes at dirt bike racin$ and other e%ents. any Dirt Bikes employees are dirt bike racin$ enthusiasts themsel%es. Se%eral are official company racers representin$ the company in dirt bike racin$ competition. Dirt Bikes recently established a Dirt Bikes USA 4wners, Group to promote stron$er relationships with customers and to make it easier for them to share their Dirt Bikes USA e)periences. Dirt Bikes also ad%ertises in ma$a#ines de%oted to motorcycle racin$ and dirt bikes. It uses a small public relations firm to place articles about new company  products or racin$ %ictories in these ma$a#ines. Dirt Bikes also pays for ads in these  publications. Selected Financial Data

e ha%e pro%ided a spreadsheet with three worksheets containin$ Dirt Bikes financial data for you to re%iew [h%$erlink Dirt Bikes Financial Data] 0 Income statement and summary balance sheet data from 8>>:-8>>< Annual sales of each Dirt Bikes model between 8>>" and 8>>< &otal domestic %s. international motorcycle sales between 8>>" and 8>>< • • •

&he income statement and balance sheet are the primary financial statements used  by mana$ement to determine how well a firm is performin$. &he income statement* also called an operatin$ statement or profit and loss statement* shows the income and e)penses of a firm o%er a period of time* such as a year* a quarter* or a month. &he $ross  profit represents the difference between the firm,s re%enue Eor salesF and the cost of $oods sold. &he $ross mar$in is calculated by di%idin$ $ross profit by re%enues Eor salesF. @et profit Eor lossF is calculated by subtractin$ all other e)penses* includin$ operatin$ e)penses and income ta)es from $ross profit. 4peratin$ e)penses are all  business costs Esuch as e)penditures for sales and marketin$* $eneral and administrati%e e)penditures* and depreciationF other than those included in the cost of $oods sold. @et mar$ins are calculated by di%idin$ net profit Eor lossF by re%enues Eor salesF. A balance sheet pro%ides a snapshot of a company,s financial assets and liabilities on a $i%en date* usually the close of an accountin$ period. It lists what material and intan$ible assets the business owns and what money the business owes either to its creditors EliabilitiesF or to its owners Eshareholders, equity* also known as net worthF. e ha%e included here are only the most important pieces of balance sheet data for you to re%iew. At any $i%en time a business,s assets equals the sum of its liabilities plus its net worth. Current assets include cash* securities* accounts recei%able* or other in%estments that are likely to be con%erted into cash within one year. Current liabilities are debts that are due within one year. (on$-term debt consists of liabilities that are not due un til after a year or more. If too much debt has been used to finance the firm,s operations* problems may arise in meetin$ future interest payments and repayin$ outstandin$ loans. By e)aminin$ a series of financial statements one can identify and analy#e trends in the financial stren$th of a business. hen e)aminin$ Dirt Bikes, income statement

and balance sheet data* pay special attention to the company,s three-year trends in re%enue EsalesF* costs of $oods sold* $ross mar$ins* operatin$ e)penses* and net income Eor lossF. 5ay attention to whether the company,s short and lon$-term liabilities are $rowin$ and whether they e)ceed assets. If a company has more current assets than current liabilities* it is a si$n that it probably has enou$h workin$ capital to fund in%estments in new equipment or information systems. &he two other spreadsheets present motorcycle shipment data between 8>>" and 8>><* which can be used to $au$e motorcycle sales. hen e)aminin$ these spreadsheets*  pay attention to the trends in sales. &his includes the sales trends for each product Dirt Bikes sells* o%erall sales trends* and the proportion of international to domestic sales.