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Retail Self-Checkout Analysis

This document presents a case for a large retailer client who is considering adding self-checkout stations to reduce costs. It provides guidance for determining the costs of implementing self-checkout, expected savings, and factors to consider such as customer preferences. Key information given includes the client's cost structure, store operations details, and empirical research on customer checkout preferences. Recommendations are requested on whether self-checkout is viable, costs, savings, and next steps. The deadline to submit a video analysis is Saturday at 11:59pm.

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Bảo Trung Nguyễn
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73 views6 pages

Retail Self-Checkout Analysis

This document presents a case for a large retailer client who is considering adding self-checkout stations to reduce costs. It provides guidance for determining the costs of implementing self-checkout, expected savings, and factors to consider such as customer preferences. Key information given includes the client's cost structure, store operations details, and empirical research on customer checkout preferences. Recommendations are requested on whether self-checkout is viable, costs, savings, and next steps. The deadline to submit a video analysis is Saturday at 11:59pm.

Uploaded by

Bảo Trung Nguyễn
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Weekly Case Challenge

Operational Optimization Case


Self-Checkout
Deadline: 23h59 - 13.03.2022

Source: Consulting Club ROSS


Problem statement narrative
Our client is a large retailer. They would like to add self checkout stations to their stores. They have asked us
to help them determine if this is a good idea. If it is, they want to know how much it will cost and what the
expected savings will be.

Source: Consulting Club ROSS


Guidance for interviewer and information provided upon request
• Their primary objective is to reduce costs and improve profit.
• They do not want to lose customers due to this initiative.
• Ignore potential revenue benefits such as increased store traffic.
• The client will only invest if there is a 2 year payback (undiscounted)
• They have approximately 900 stores nationwide.
• Annual revenue is $20 billion.
• Cost structure data is available on the next slide.
• They have almost no experience with self checkout stations.
• Assume no capital constraints.

Source: Consulting Club ROSS


Area the candidate should explore Information provided upon request

• The average store has 16 cashiers per shift.


• They make $10.00/hour. Assume they work 8 hours per day.
1. Impact on Costs: • It is okay to ignore overtime, benefits, etc.
• Current cost structure • Total cost of each machine is $50K. This includes installation.
• Required investment • Assume annual maintenance is negligible. It can be ignored for this case.
• One employee can oversee four (4) self check-out machines.
• Expected savings
• The store operates on 2 shifts: 8 am- 4 pm and 4 pm to midnight.
• Assume constant flow of customers. No peak.
• Assume 350 days/year.

• 10% of customers surveyed stated they would not use the new machines
2. Utilization of New Machines
and would prefer to shop elsewhere if forced to do so.
• Customer preferences/tastes/ability
• Empirical research (with other retailers) suggests that when a customer
• Number of items to scan has more than 15 items, they prefer a cashier to self check-out stations.
• Size of items to scan This applies to 15% of check-outs.
• Learning curve of customers • Assume no learning curve effects for this calculation (although candidate
can bring it up in recommendation/next steps)

Source: Consulting Club ROSS


Recommendations Risks Next Steps

Source: Consulting Club ROSS


• Submit your video on time via link: https://forms.gle/QwtjcEtmvhJK5FhMA
• Deadline: 23h59 - 12.03.2022 (Saturday)
• If you need any further supports, please contact fanpage The Trainee Club or reply email
from [email protected].
• Wish you all the best!

Source: Consulting Club ROSS

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