BRANT FREEZER

COMPANY
BRANT FREEZER COMPANY

 Located in Fargo, North Dakota, the Brant Freezer Company manufactures industrial freezers.
 These freezers come in one size and are distributed through public warehouses in Atlanta,
Boston, Chicago, Denver, Los Angeles, Port-land, and St. Louis. In addition, some space is
used in the company’s Fargo warehouse.
 Young Joaquin (J. Q.) Brant, with a fresh MBA degree from the University of South Alabama,
returned to the family firm, where he had once worked during summers.
 On his first day of work, J. Q. met with his father. His father complained that they were
being “eaten alive” by warehousing costs.
 The firm’s controller drew up a budget each year, and each warehouse’s monthly activity
(units shipped) and costs were tallied. Exhibit 3.A shows actual 2016 figures for all ware-
houses, plus actual figures for the first five months of 2017.
 Projected 12-month 2017 budgets and shipments are also included. Exhibit 3.B shows the
Income State-ment for 2016. Exhibit 3.C is the 2016 Balance Sheet. If you are familiar with
Excel or other spreadsheet software, you might try using it to answer the following questions.
Questions

 1. When comparing performance during the first five months of 2017 with
performance in 2016, which warehouse shows the most improvement?
 2. When comparing performance during the first five months of 2017 with
performance in 2016, which warehouse shows the poorest change in performance?
 3. When comparisons are made among all eight warehouses, which one do you
think does the best job for the Brant Company? What criteria did you use? Why?
 4. The year 2017 is nearly half over. J. Q. is told to determine how much the firm
is likely to spend for warehousing at each of the eight warehouses for the last six
months in 2017. Do his work for him.
 5. Use the 2016 Income Statement and Balance Sheet to complete a Strategic
Profit Model for J. Q.
 6. Holding all other information constant, what would be the affect on ROA for
2017 if warehousing costs declined 10% from 2016 levels?