Practical Management Science
Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Kamal Fatehl production manager of Kennesaw​ Manufacturing, finds his profit at
​$22,400
​(as shown in the statement​ below) inadequate for expanding his business. The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment. Kamal would like to improve profit line to
​$32,400
so he can obtain the​ bank's approval for the loan.
                                                                                                                                                                                                                                                                                                                                                                                          
 
 
​% of sales
Sales
280,000
​100%
Cost of supply chain purchases
201,600
72​%
Other production costs
28,000
10​%
Fixed costs
28,000
10​%
Profit
22,400
8​%
Part 2
​a) What percentage improvement is needed in a supply chain strategy for profit to improve to
​$32,400​?
What is the cost of material with a
​$32,400
​profit?
 
A decrease of
enter your response here​%
in​ supply-chain costs is required to yield a profit of
​$32,400​,
for a new cost of supply chain purchases of
​$enter your response here.
​(Enter your response for the percentage decrease to one decimal place and enter your response for the new supply chain cost as a whole​ number.)
Part 3
​b) What percentage improvement is needed in a sales strategy for profit to improve to
​$32,400​?
What must sales be for profit to improve to
​$32,400​?
 
An increase of
enter your response here​%
in sales is required to yield a profit of
​$32,400​,
for a new new level of sales of
​$enter your response here.
​(Enter your response for the percentage increase to one decimal place and enter your response for the new sales as a whole​ number.)
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