Jerry Jackson is getting ready for the holiday season. Jerry is the purchasing manager for a large
Question:
Jerry Jackson is getting ready for the holiday season. Jerry is the purchasing manager for a large online toy store, Elves R Us.
Due to supply chain issues and price increases, Jerry is concerned about placing too many toy orders with any one supplier. He is also concerned about supplies of the toy, "Avastar" which recently became very popular with 8 to 12 year old children and is expected to be the most requested toy for this holiday season.
The suppliers used by Elves R Us are: Lyra, Goodwin's, Jackson, Simple Goods and Woodson.
No other vendors are approved by Elves R Us.
Jerry has run a report detailing all purchase orders placed in 2022, specifically for the holiday season.
This data is included in the "Toy Data" tab. You need to analyze this data and see if Jerry's concerns are warranted.
Answer the following questions:
a) Elves R Us is expecting to receive orders from customers of $500,000 for the Avastar product.
The profit margin percentage is 40%. Based on current stocks, does Elves R Us have enough product?
b. Should the company increase or decrease orders to any suppliers?
Principles of Corporate Finance
ISBN: 978-1260013900
13th edition
Authors: Richard Brealey, Stewart Myers, Franklin Allen