46th Annual Society for Case Research & Global Jesuit Case Series Summer Workshop 2024

Experience level: 
Intended Audience: 
Dena Breece, Chris Solano, University of North Carolina at Pembroke

Floorplan at an automobile franchise: Get that motor running!

This critical incident discusses the complexities of automobile inventory management for a dealership. Specifically, Kevin McConaughey has been the General Manager for American Auto Sales (AAS), a franchise located in North Carolina. He has the daunting task of forecasting inventory over 60 to 90 days while being asked to take on more vehicle inventory from the manufacturer. Floorplan, financed vehicles, have resulted in accrued interest. The manufacturer has reimbursed the dealership for interest expenses up to 60 days. Beyond 60 days, the dealership has had to absorb the costs, which hurts the bottom line. With recent increases in interest and new automobile inventory levels, students are asked to consider the details of the case to assist McConaughey with an analysis of inventory trends and interest expense to offer recommendations for inventory management for McConaughey.