Hau Lee Furniture, Inc., spends 50% of its sales dollars in the supply chain and finds...
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Hau Lee Furniture, Inc., spends 50% of its sales dollars in the supply chain and finds its current profit of $16,000 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 $21,000 so he can obtain the bank's approval for the loan. Current Situation Sales Cost of material $80,000 $40,000 (50%) Production costs Fixed cost Profit $12,000 (15%) $12,000 (15% ) $16,000 (20%) a) What percentage improvement is needed in the supply chain strategy for profit to improve to $21,000? What is the cost of material with a $21,000 profit? A decrease of % in material (supply-chain) costs is required to yield a profit of $21,000, for a new material cost of $(Enter your response for the percentage decrease to one decimal place and enter your response for the new material cost as a whole number.) b) What percentage improvement is needed in the sales strategy for profit to improve to $21,000? What must sales be for profit to improve to $21,000? An increase of % in sales is required to yield a profit of $21,000, for a new new level of sales of $ (Enter your response for the percentage increase to one decimal place and enter your response for the new sales as a whole number.) Hau Lee Furniture, Inc., spends 50% of its sales dollars in the supply chain and finds its current profit of $16,000 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 $21,000 so he can obtain the bank's approval for the loan. Current Situation Sales Cost of material $80,000 $40,000 (50%) Production costs Fixed cost Profit $12,000 (15%) $12,000 (15% ) $16,000 (20%) a) What percentage improvement is needed in the supply chain strategy for profit to improve to $21,000? What is the cost of material with a $21,000 profit? A decrease of % in material (supply-chain) costs is required to yield a profit of $21,000, for a new material cost of $(Enter your response for the percentage decrease to one decimal place and enter your response for the new material cost as a whole number.) b) What percentage improvement is needed in the sales strategy for profit to improve to $21,000? What must sales be for profit to improve to $21,000? An increase of % in sales is required to yield a profit of $21,000, for a new new level of sales of $ (Enter your response for the percentage increase to one decimal place and enter your response for the new sales as a whole number.)
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