MGMT 3372 Homework Two Due Date: September 30, 2021, by class time A large appliance company, Sears, has recently hired you. As part of an effort to help Sears get better control of their inventory throughout the supply chain, you have been given a series of tasks. Please help Sears as best you can before they go bankrupt! 1. Sears sells the following appliances in their stores: Item Sales Costs Profits % of Profits Cumulative % of Profits Li $500,000 $250,000 L2 $450,000 $600,000 $780,000 L3 $680,000 F1 $200,000 $150,000 F2 $100,000 $80,000 $2,180,000 $1,610,000 Based on profits, classify the different appliances Sears sells into three different classes: A, B, and C. Each class must have at least one item in it (.e. there must be at least one class A item, one class B item, and one class C item). Please provide justification for why you classified each item in a particular class. 2. Sears holds different amounts of inventory for each of their appliances. Sears is particularly interested in the inventory of two specific items from the above table: L1 and F1. For item L1, Sears typically holds about $100,000 worth of inventory at any one point in time. For item F1, Sears typically holds about $25,000 worth of inventory at any one point in time. For both items, please calculate the inventory turnover ratio as well as the time in inventory (in days). Assume that Sears is open for 365 days a year. In your own words, explain what the turnover ratio and the average time in inventory mean for items L1 and F1. 3. After receiving the appliances from manufacturers, Sears ships the appliances weekly from one of two warehouses to one of five different retailers. The warehouses are located in Mexico City and Chicago, while the retailers are located in New York, Atlanta, San Diego, St. Louis, and Denver. Given the following cost information, find the total cost of shipping using the Northwest Corner Method and the Intuitive Lowest Cost Method. TO FROM New York Atlanta San Diego Supply St. Louis Denver Mexico City $12 18 $8 $5 $10 $4 Chicago $11 14 $3 $7 $9 56 Demand 6 8 12 4 2 32