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The service station investment decision in the context of network rationalisation

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dc.contributor.author Bissett RA en
dc.date.accessioned 2016-09-22T09:16:06Z
dc.date.available 2016-09-22T09:16:06Z
dc.date.submitted 1982 en
dc.identifier.uri http://hdl.handle.net/20.500.11892/51798
dc.description.abstract A plan to rationalise the service station network, with the objective of reducing the total number of outlets, to improve the overall viability of individual service stations, is presently being negotiated. This report evaluates the implications of the plan s "closures for quotas" policy on future projects, in terms of profitability. The report reviews the literature and background to the concept of the cost of capital, and to project evaluation techniques. Elements considered to be appropriate to the evaluation of service stations are then incorporated into a financial model. A review of the concepts of statistical sampling, and of correlation and regression, is undertaken. A sample from Shell South Africa (Pty) Limited's network has been selected and volume and cash-flow data applied to the model. The degree of correlation between the sales volumes and related net present values is computed. An equation for the prediction of the NPV of service stations is formulated. Although a significant degree of correlation between NPV and sales volume is found to exist, the degree of dispersion about the regression line is such that sub optimal decisions could be made. It is shown that the market segments and financial structuring of service stations have a major influence, in conjunction with volume, in the determination of an outlet's worth. en
dc.language English en
dc.subject Business administration / Business leadership en
dc.subject General en
dc.title The service station investment decision in the context of network rationalisation en
dc.type Masters degree en
dc.description.degree MBA en

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