Importance of the Working Capital

The working capital is a measure of both companys efficiency and its shortterm financial health. On other words, working capital is the measure if cash or liquid
assets essential for its day-to-day operation. Calculating working capital can help
entrepreneur identify the value of current assets and able to meet financial
obligations. It is simply the currents assets in excess of current liabilities.
There are two important things necessary in managing working capital; the ratio
analysis and the management of the components of the working capital such as
inventory, account receivable and account payable.
For the case study of Mystery of the Disappearing Oil, Mat Jon should know
his Spetrols working capital at least with the help of Jamel. He should not only rely
on Jamel to manage all of the day-to-day operations without him monitoring him
eventhough Jamel is his brother-in-law. Mat Jon must consider three main points to
working capital; consider the need for working capital, get the optimum level of
working capital where profitability and risks are in balance and use liquidity and
profitability policies of working capital.
In addition, knowing his Spetrols working capital is an important thing where if
his companys current assets do not exceed its current liabilities, then it may run into
trouble paying back creditors in the short term and the worst scenario is bankruptcy.
Importance of Inventory Management (Petrol Kiosk)
Inventory management is primarily about specifying the shape and
percentage of stocked goods. The intent of inventory management is to continuously
hold optimal inventory levels where it concerns the fine line between replenishment
lead time, carrying costs of inventory, asset management, inventory forecasting,
inventory price forecasting, quality management and etc. Balancing the requirement
stated leads to the optimal inventory levels, which is on-going process as the
business needs shift and react to the wider environment.
For the case study for Mystery of the Disappearing Oil, Sudin can manage
those inventories by monitoring of stock moved into and out of stockroom locations
and the reconciling of the inventory balances.
Mat Jon can send both Jamel and Sudin for training thus they can manage
inventory by practicing ABC analysis, lot tracking, or cycle counting support. All of

these practices lead to optimal product storage, helping minimize holding and
handling costs. Mat Jon can improve his Spetrols cash flow and does not have to
spend large capital balances for purchasing enormous amounts of inventory at once
and at the same time can save handling and holding costs.

Service Marketing Issue

The process structure and basic characteristics of services can have serious
and less curious impact for the client behavior and internal organization and through
this for the marketing policy of those companies providing services.
There are some severe problem companies in the service sector are faced
with; internal marketing, capacity management, variable quality. Internal marketing is
the quality of the service provided that is depends on the motivation and quality of the
staff. Internal marketing is important in the service sector. While, capacity
management is the service cannot be stocked up like physical products, so unused
capacity will always be lost. Lastly, variable quality is where since personnel plays
important role in the service providing process, this process is hard to standardize.
For the case study of the Mystery of the Disappearing Oil, Spetrol also
confront the same service marketing issues that is internal marketing and variable
quality.
For the internal marketing, pump attendant of Spetrol acting rude towards
their regular customer, Supramaniam. He ignoring Supramaniams question asking
where is the manager and rudely answer that manager is not around. For variable
quality, the important personnel here is Jamel as the manager of the Spetrol.
However, Jamel himself commit fraud and making losses to the Mat Jon.