Hau Lee Furniture, Inc., spends 60% of its sales dollars in the supply chain and finds...
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Hau Lee Furniture, Inc., spends 60% of its sales dollars in the supply chain and finds its current profit of $10,000 inadequate. The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment. Hau would like to improve the profit line to $25,000 so he can obtain the bank's approval for the loan. Current Situation Sales Cost of material Production costs Fixed cost Profit $100,000 $60,000 (60%) $20,000 (20%) $10,000 (10%) $10,000 (10%) a) What percentage improvement is needed in the supply chain strategy for profit to improve to $25,000? What is the cost of material with a $25,000 profit? A% decrease in material (supply-chain) costs is required to yield a profit of $25,000, for a new material cost of $ (Enter your responses as whole numbers.) b) What percentage improvement is needed in the sales strategy for profit to improve to $25,000? What must sales be for profit to improve to $25,000? A% increase in sales is required to yield a profit of $25,000, for a new new level of sales of $ (Enter your responses as whole numbers.) Hau Lee Furniture, Inc., spends 60% of its sales dollars in the supply chain and finds its current profit of $10,000 inadequate. The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment. Hau would like to improve the profit line to $25,000 so he can obtain the bank's approval for the loan. Current Situation Sales Cost of material Production costs Fixed cost Profit $100,000 $60,000 (60%) $20,000 (20%) $10,000 (10%) $10,000 (10%) a) What percentage improvement is needed in the supply chain strategy for profit to improve to $25,000? What is the cost of material with a $25,000 profit? A% decrease in material (supply-chain) costs is required to yield a profit of $25,000, for a new material cost of $ (Enter your responses as whole numbers.) b) What percentage improvement is needed in the sales strategy for profit to improve to $25,000? What must sales be for profit to improve to $25,000? A% increase in sales is required to yield a profit of $25,000, for a new new level of sales of $ (Enter your responses as whole numbers.)
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To solve these problems we need to examine the current financial situation of Hau Lee Furniture Inc and determine what changes need to be made in orde... View the full answer
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