1. Bernie Saint is a production manager for Francis Manufacturing Company. The company's profit is currently $30,000. He would like to increase this to $50,000.

See statement below:

% of Sales

Sales $500,000 100%

Cost of Supply Chain Purchases 350,000 70%

Other Production Costs 60,000 12%

Fixed Costs 60,000 12%

Profit 30,000 6%

a. He believes that if he improves his supply chain strategy, this may result in attained the desired profit level. What percentage improvement is needed in the supply chain strategy in order to achieve the desired profit level of $50,000? What is the cost of supply chain purchases that corresponds to the $50,000 profit level?

b. Alternately, if Bernie tried to achieve the $50,000 profit level via a sales strategy instead, what percentage change in sales, and what dollar value of sales is needed to achieve a profit of $50,000?

2. Company A has the following financial data points:

Net Revenue $30,000

Cost of Sales $26,000

Inventory $2,000

Total Assets $15,000

a) what are their inventory turns? from a financial perspective only, what is better - higher or lower inventory turns?

b) what is their percent of assets committed to inventory? from a financial perspective only, what is better - higher or lower percent of assets committed to inventory?

c) what is their weeks of supply?

Answer rating: 100% (QA)

1a To calculate what improvement in the supply chain strategy is needed to achieve a profit of 50000 ... View the full answer