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Sample 1

Sample 2

Executive Summary

The primary objective of the present project was to understand the reasons for a decrease
in gross profit margin. It was reported by Associated Grocers that there were substantial
dips in gross profit margin for both June and August in the sequential fiscal years of 2012
and 2013. More specifically with the aid of business intelligence tools, this project seeks to
answer several questions proposed by AG’s upper management that will lead to better
decision making.
•What could be the possible reason(s) for the decrease in gross profit margin?
•Which stores/chains of stores were under-performing?
• Will smoothing of the freight matrix be of benefit to AG and improve gross profit margin?
•Analysis of slow and fast moving items?
•Does inflation have an impact on low gross margins?
In order to answer these questions, business intelligence dashboards have been designed in
Power View utilizing sales data spanning over sixteen months composing of store location,
sales/orders from supplier to individual stores along with item and category descriptions.
SAS was used extensively to manipulate and analyze the 24 million individual records.
Numerous subsets of the original datasets were created to run the analyses. Exponential
smoothing and moving average were used to modify the current freight matrix. Several
recommendations are presented based on these analyses and potential reasons for the
decrease in gross margin are discussed. A better assessment is possible by including
additional data for analysis in order to dig deeper and discover the reasons for the decrease
in gross profit margin. This could be a topic of future research. Also seasonal trends should
be analyzed for the dip in gross profit margin during June and August. To conclude, the
information generated in this report serves as a benchmark for Associated Grocers to obtain
insight into what could be potential reasons for the decline in gross margin. No specific
reason was attributed for the decrease in gross profit margin which aligns with AG’s
understanding. The results of this project will lead to decisions by AG in terms of
implementation of one of the two recommended freight matrices, introduction of a 15

freight and overall sales bracket, and an extensive review of slow moving items to reduce
inventory costs. A significant improvement in gross profit margin is expected to occur
through implementation of either recommended freight matrix.
Sample 3