Case: Sorrell Ridge a. What are Sorrell Ridge's sources of negotiating power and weaknesses? What about Bromar’s?
This case is about the slotting allowance when Allied Old English Company wants to introduce the Sorrell Ridge spreadable fruit product into the California market. Considering the factors including product itself, market, distribution channels, consumers’ needs& demand, competitor’s profiles, we analyzed the negotiating power and weakness of Sorrel Ridge and Bromar.
Sorrell Ridge’s power:
1) Uniqueness of product itself: Comparing to its competitors’ products, Sorrel Ridge could be a diabetic diet.
2) Volume of the Product itself: it holds 60% of retail sales in the all-fruit segment.
3) Consumers’
…show more content…
In sum, the total cost for Sorrel Ridge in California in 1987 will be expected to be 565,110+250,000+77,000+200,000+150,000+35,000+67,500 = $ 1164610.
Thus, the estimated profit for Sorrel Ridge in California in 1987 will be 1418400-1164610= 253,790.
In our second assumption, instead of using the cost of goods per cases in 1986, we try to use the percentage it counts in the total expenses which is 50.4% and to find the sales needed to break-even. The detail of the calculation is shown in the answer for questions d. The result is that 95,635, a little bit higher than the estimated sales of 90,000.
Consider both assumption, we still recommend Pressman agree to the first year program. They will have a optimistic profit under the first assumption and even the case is worse than that, they won’t lose too much. The Slotting fee is one-time and it’s important to step into the empty market in California with a little risk. c. What should Sorrell Ridge's push and pull strategy be? How does the first year marketing program you recommend fit into this push-pull strategy? (the push-pull model will be helpful in this thought process). What market share are you trying to
1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units?
The rise in revenue was rapid starting from the year of operations. The key period of business was from April to September were revenues were equal to 65% of total revenue as the product was seasonal. The basis of forecasting for the year 1981 & 1982 is the expectations of sales by Mr. Turner & Mr. Rose. It is given that total sales were $ 15.80 million in first half of year 1981 and the total sales in 1981 to reach $ 30 million. Profit after tax was expected to be $ 1 million for 1st half and we assumed for the next half, profit will be in proportion to first half & expected to be amounting to $ 0.90 million. For year 1982, the sales expectation by Mr. Rose was around more than $ 71 million &
The American Civil War was a major and crucial point in American History. It influenced the citizens of America in many ways. The War was conducted in two key areas of the United States. These parts were in the east and west of the Mississippi River. On March 8, 1862, a pivotal battle took place. A slight encounter at Pea Ridge, Arkansas led to the Union Army’s domination of the west. The Battle of Pea Ridge had a great impact on the civil war by giving control of the west to the Union Army.
The Battle of Elsenborn Ridge was a definitive, but effortful, victory of the Battle of the Bulge. On the 16th of December 1944, the Battle of the Bulge officially commenced on Belgian grounds (Cole 331). Among its many, devastating battles, the Battle of Elsenborn Ridge remains the most compelling, due to the unwavering resilience of American forces. American artillery in this battle arose with relative force, effectively withstanding and deflecting German forces. Victory, in the Battle of the Bulge, eluded American forces until the fateful Battle of Elsenborn Ridge. This was due, primarily, to the adaptive repurposing of existing weaponry, and other timely innovations. The Americans established a rigid defensive line at Elsenborn Ridge, a portion of Belgian territory, which became the fortuitous target of German attacks on the Roderhohe and Kodenhovel. The Germans were pristinely equipped in this war and content in their capacity to expel American forces. However, their hopes were tarnished as American artillery erected a formidable defense on their attacks. The American military mounted a heap of Pozit fuze shells, proximity fuses, and artillery adapted to diffuse the German forces (Cole 361). These attacks proved highly destructive amid the sight of countless German and American casualties. Hence, German
Breakeven Analysis for Product Tylenol Approach 1 - Same price as Tylenol Approach 2a - Cheaper than Tylenol Approach 2b - Cheaper w/lowered trade cost $ $ $ $ Unit Cost (Variable Cost) 0.60 0.60 0.60 0.60 Trade Cost (Selling Price to Retailers) $ 1.69 $ 1.69 $ 1.05 $ 0.70 Fixed Cost (Advertising) 2,000,000 6,000,000 6,000,000 6,000,000 Break-Even Quantity [Fixed Cost/(Trade Cost-Unit Cost)] 1,834,862 5,504,587 13,333,333 60,000,000 Contribution Margin (Unit) 64% 64% 43% 14%
To perform a break-even analysis, we have made the following assumptions: (a) retail margin= 60%, (b) the additional fixed cost of production per flavor, including advertising, bottling run and sundries, is $10 million and this is assumed to be an annual cost, except the bottling run, (c) a conservative estimate of percentage share of market figure is derived by multiplying the market segment percentages, as well as the age segment percentage for the category > 40 yrs. The percentage = 74% x 62% x 85% x 40% = 16%. We first determine the retail
* Refer sheet “25000 Sales” for cost incurred and Gain/loss for AIFS for different scenarios and actual sales volume of 25000.
This question gives students an opportunity to exercise their ability to interpret break-even analyses. Key teaching points should include explaining the preparation of a break-even chart, the interpretation of the break-even volume (938,799 hectoliters [HL]), and the comparison of the break-even volume to the current volume (1,173,000 HL). Another key point is that the chart in case Exhibit 5 is relevant only for the current cost structure of the company—if variable costs increase or the plant expansion is approved, the break-even volume will rise. Finally, students should be aided in understanding that “break-even” refers to operating profit, not free cash flow. The typical use of the break-even chart ignores taxes, investments, and the depreciation tax shield.
a. Assuming the most current operational cost levels, what sales must it generate to recoup the above investment?
This paper will describe the problem that Pacific Oil Company faced as it reopened negotiations with Reliant Chemical Company in early 1985. Secondly I will identify and evaluate the styles and effectiveness of Messrs, Fonatine, Guadin, Hauptmann, and Zinnser as negotiations in this case. Finally I will outline what Frank Kelsey recommend to Jean Fontaine at the end of the case? Why?
Question 2: In order to compute the new breakeven point is sales tickets and sales dollars, we must break down the variable and fixed costs of which are in thousands. Please see figure 2-2 in the Appendix for the calculations. Based on the calculation, the new breakeven point in sales tickets is $2,435 and the breakeven in sales dollars is $3,063.230.
A retailer has yearly sales of $650,000. Inventory on January 1 is $260,000 (at cost). During the year, $500,000 of merchandise (at cost) is purchased. The ending inventory is $275,000 (at cost). Operating costs are $90,000.
Two issues are present in the case. The first is a decision on what research should be conducted by Manson and Associates to allow Larry Brownlow to estimate the feasibility of a Coors beer distributorship for a two-county area in Delaware. This issue is evident, even stressed, throughout the case. The second issue is a decision on whether or not the distributorship is feasible or, in other words, a go/no-go decision by Brownlow regarding his application. This issue is largely implicit in the case.
We want to know the amount aluminum cans account for in the cost of sales. According to the provided information cans account for 60% of net revenues. Net revenue in 1994 will be $231,207 * 1.04 = $240,455. The cans contribute 0,60 * $240,455 = $144,273. With a gross margin on cans of 27% the cost of sales of aluminum cans for 1994 is
Through a profit margin breakeven analysis we were able to conclude that in order to breakeven with 617,731 units