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.
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.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Question
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.)Expert Solution
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