Economics

Analytical information is very important in any venture. In business however, this practice is not only necessary but also a sufficient condition for success. Asset management needs a lot of inventory recording and analysis of the inventory. The management of assets will involve taking full custody and managing of both fixed and liquid assets. While this industry may offer sufficient returns, the maintenance of requisite data plays a key role in getting maximum returns from the business. My company has had a problem of having a longstanding stock. This has generally jeopardized the general course of the company.

Having been entrusted with the management of the asset department in the management company, it emerged that the dead stock mainly comprised housing unit of single bedroom and bed-sitters. A further interrogation of the data revealed to me the houses with the high cost were doing well. I chose to take a deeper analytical interpretation of the data and after the analysis, report adequately to the management (Akhtar M, 2001, p 67).

I did analyze the inventory on sales, costs and nature of the assets basis. The records were quite massive and to reduce the fatigue of analyzing the entire data, I sampled out the last 45 days of the trading period. Within period, I did assume no further acquisition of assets were undertaken, market trends remained same and strictly stuck to the data that was available at that point in time. At the very onset, it looked so apparent that transactions on mansions, triple bedroom and double bedroom had a relatively high rate of turnover compared to single and bed-sitter.  The sampling was randomly done ensuring the chronological filing system offered the highest confidence level. Given that there were no initial researches undertaken on the same, the cumulative frequency was used to establish a sample with the least tolerance and with the highest confidence level.

The data available had the major components of cost of the house, nature of the house number of units sold monthly and cumulative revenue. This data was considered for a period of 45 days it was representative to the effect reflected in a cumulative frequency table, after the table was analyzed it emerged that, the variance was quite high. This was indicative of the fact that there were a lot of fluctuations in market trend. This was as a result of the limited demand exhibited by the bed sitters. Similarly this high variance was directional in a sense that the relative returns from the venture in general were not promising enough.

The discrete nature of the data in question made calculations quite easy. In this research finding there were no suites that were sold in part. The housing suites were only sold in full. This makes the idea of rounding off out of question.  Besides, the whole numbers made calculation of the various measures of dispersion and measures of central tendency quite easy.

From the table and chart, it is evident that the company has invested in relatively many units of bed-sitters however the turnover of the bed sitters is quite low. The mansions on the other hand tend to strike a balance between initial stock and sales. The implication being that at the end of the trading period, closing stock in terms of units for mansions is quite low. The concept of turnover is reached at though the utilization of the concept of average sales per week. If the average sales per trading period are high it is indicative of robust business trend.

It is likely that the variances means, standard deviation and other instrumental measures may take continuous forms. However, the fact that the starting point will offer some easy of working with the figure.

The probabilities of disposal display a further need for review of the stocks. The probability during the duration that any bed-sitter would be sold was
No. of bed-sitters sold
 Initial No. of bed sitters.
13
130 0.1
The probability that a mansion would be sold at any time during the period was
 No. of mansions sold
   Initial Number of mansions
20
0.95.
The probability that a double bedroom would be sold at any given time by the company
No. of double bedroom
   Initial Number of double bedroom
64
0.89
The probability that a double bedroom would be sold at any given time by the company
No. of single bedroom
   Initial Number of single bedroom
23
65                   0.35
The probability that a double bedroom would be sold at any given time by the company
No. of triple bedroom
   Initial Number of triple bedroom
51
   56                0.91
Data adapted from Akhtar M, p. 142

From the probabilities, it is evident that the likelihood of an asset being disposed of at a given time increases with increase in cost price. Apparently, the demand relationship within the business environment in the setting of the company assumes a Veblen goods curve.

The overview model for the general disposal of assets within the company assumes a curve such as represented below

If the above model analysis if anything to go by, then the company has to reduce the investment in bed sitters.

Given that within the period the turnover for the double bedroom, three bedroom and the mansions is relatively high the company will opt to invest every single shilling from the bed sitters, into either double, triple and mansions.

In making decisions on the best stocks to be handled by the management company I will consider the asset that is highly demanded relative to its capital base. Within the strength of this argument mode will be most applicable. The mode in this context will be represented by the probability of sale of the assets. However, because the capital base of the company is not as sufficient, I will consider relatively small portions of the low moving stocks to cater for the customers in this cadre. The central asset will equally be given high priority this is because the capital base is relatively low and their turnover relatively high (Saleemi, S A., 1983, p 43)

From the analysis above, it is evident that the market base of the company is majorly the upper and the middle class. This is evident from the fact that demand is quite high for the expensive assets. It is also evident that investing much into the cheaper assets would only increase the number of assets but this increase in the value of the assets may not be reflected in the general turnover of the company. It is therefore plausible that if the company has to maintain investments in the bed sitters and single bedroom houses, then a market should be explored elsewhere.

In conclusions, if capital is not limiting, to reap maximum out of business the market base should be analyzed to identify their relative consumption abilities. Further, the values and aspirations of the market base should be well studied to avoid unnecessary dead stock. This way, the business will have a sufficiently high turnover which will be accompanied by increased profit, ceteris Paribas.