You are the Manager of a business. It could be a retailer, distributor or manufacturer. You...

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You are the Manager of a business. It could be a retailer, distributor or manufacturer. You are contemplating increasing customer service from 95% to 98% for your business to better service your customers needs. This means, you will have the product available 98-percent of the time when a customer wants to purchase it. The following are estimated to happen in your business: Assumptions: Sales are currently $80.000,000 Labor would increase $34,000 Direct materials (one-time increase) $40,000 Transportation would increase $60,000 Rent would increase $18,000 to accommodate the additional space to store the inventory Inventory would increase by $3,000.000 Fixed overhead is $100,000 and does not need to be increased above its current level. Inventory carrying cost 25% Contribution Margin on the product 30% You will make the inventory permanent, meaning it will be stored for 365-days 1. If sales are projected to increase by 2%, would you spend the money to increase service levels? Why or why not? You must justify your answer with quantified analysis 2. If sales are projected to increase 8%, would you spend the money to increase service levels? Why or why not? You must justify your answer with quantified analysis. You are the Manager of a business. It could be a retailer, distributor or manufacturer. You are contemplating increasing customer service from 95% to 98% for your business to better service your customers needs. This means, you will have the product available 98-percent of the time when a customer wants to purchase it. The following are estimated to happen in your business: Assumptions: Sales are currently $80.000,000 Labor would increase $34,000 Direct materials (one-time increase) $40,000 Transportation would increase $60,000 Rent would increase $18,000 to accommodate the additional space to store the inventory Inventory would increase by $3,000.000 Fixed overhead is $100,000 and does not need to be increased above its current level. Inventory carrying cost 25% Contribution Margin on the product 30% You will make the inventory permanent, meaning it will be stored for 365-days 1. If sales are projected to increase by 2%, would you spend the money to increase service levels? Why or why not? You must justify your answer with quantified analysis 2. If sales are projected to increase 8%, would you spend the money to increase service levels? Why or why not? You must justify your answer with quantified analysis.

Answer rating: 100% (QA)

There are numerous sorts of trade models Each one changes significantly based on the sort of organiz... View the full answer