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Transcription of this question: 4.BDMBDM manufactures motors used in small kitchen appliances. It operates in its original factory builtin 1977, which is located near the centre of a large and growing city. Since 1977, property valueshave risen significantly and are forecasted to increase further. Most of BDMs workers purchasedtheir homes decades ago and live near the factory. Younger workers, however, complain thataccommodation near the city centre costs too much for them to live nearby. Older workers areloyal to the company and in many cases have specialized skills.Recently, BDMs sales have rapidly increased through intemal growth, and the factory shouldreach full capacity within several years. BDMs loyal customers value its unique selling proposition(LISP): lower prices than competitors of comparable quality. Customers are small businesseslocated in the city which use BDMs motors to help with the manufacture of inexpensive appliancesfor local markets. 5% of BDMs sales are made through business-to-business (82B) e-commerce.Sales are increasing.BDM is profitable. Stock turns over in 35 days and creditor accounts are settled in 3() days.Last year, BDMs sales revenue was $24 000 000 and its debtor’s accounts balance was$2 176 000 at the end of its financial year. The industry standard of credit terms is for customers(debtors) to pay in 30 to 35 days. Because of the poor management of sales growth and use ofjust-in-case stock control, BDM has a liquidity problem.To resolve its liquidity problem, BDM is considering two options:• (Option 1) sell the factory and relocate to a much larger one located 27 kilometres from the citycentre. The new factory (for BDM) would cost significantly less.• (Option 2) sell the factory and lease it back from the purchaser. Change to just-in-time stockcontrol management and shorten the credit terms given to customers from 30 to 15 days.(a)(b)(c)(d)(f)Define the term intemal growth.Identify two features of e-commerce.Calculate the debtor days ratio (show all your working).Explain two problems, other than liquidity, for BDM, of rapid sales growth.Analyse the possible impact on pricing and place in the marketing mix, if BDMmoves from its current location (Option 1).Discuss BDMs Option 2 to resolve its liquidity problem.[2][2][2]

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