PLEASE USE THE NUMBERS POSTED. DO NOT COPY AND PASTE FROM OTHER CHEGG ANSWERS. I WILL DOWNVOTE AS I HAVE ALREADY LOOKED AND THEY ARE WRONG. THANK YOU SO MUCH. (;

Qig10sweaters.com is a new company started last yoar by two recent college graduates. The itea behind the company was simple. They will seil premium lago sweaters far Big Ten colleges with one majoe, unique feature. This unique feature is a special large alumni, particularly avid football fars who want to show support during the football season. The company is off to a great start and had a successful first year while sailing to anly a few schools. This year they plan to expand to a few more schnols and target the entire ig Ten Conference within three years. You have been hired by eigtosweaters.com and need to make a goed impression by making good supply chain decisions. This is your aig opportunity with a startup. There are only two people in the firm and yoe were hired with the prospect of possibly becoming a was getting into Internet sales. The experience was great, but now you are on your awn and have none of the great support that the big comparry had. You need to find and analyze your own data and make same big decisiors. Of course, Rhanda and Steve, the partners who started the company, are knowiedgeable about this venture and they are going to help along the way. Ahenda had the idea to start the company two years ago and talked her friend from business school, Steve, into joining hec. Rhanda is as a techic. She can really make the website sing. ta some small venture capital people in the area. Last year, he was successful in getting them to invest $2,000,000 in the company (a could go investmenti, There were some significant strings attached to this investment in that it stipulated that only $100,000 per year addition, the venture capital company gets 21 percent of the company profits, before tawes, during the first four yeas of operation assuming the company makes a proff. Yaur first job is to focus an the firm's impntory. The company is centered on selling the premium sweaters to college football fans through a website. Your analysis is important since a significant portion of the company's assets is the inventory that it carries. The business is cyclic, and sales are cancentrated during the period leading up to the college foothall season, which runs between the Midwest region of the United States. In particular, they are targeting The Ohio State University (OSUJ, the University of Michigan (UM. Michigan State University (MSU). Purdue Unhersity (PU), and Indiana University (IU). These ftwe schools have major foatali programs and a loyal fan base. The firm has considered the idea of making the sweaters in their own factory, but for now they purchase them from a supplier in China. The peices are great, but service is a prablem since the suppler has a 20 -week lead time for cach order and the minimum arder size is and 250 for 1U. Within each logo sub lot, sizes are allocated based on percentages and the suppler suggests 20 percent X-large, 50 percent large, 20 percent medium, and 10 percent small based an their histerical data. Once an order is received, a local subcontractoe agples the monograms and ships the sweaters to the customer. They store the invertory of sweaters for the compary in a smail warchouse area located at the subcontroctoe. This is the company's second year of aperation. Last year they only sald sweaters for three of the schools, OSU, UM, and PU. They ardered the minimum 5,000 sweaters and said al of them, but the experience was painful since they had too many UM sweaters and sold at a steep discount on eBay after the season. They were hoping not to do this again purchased from the supplier in China. Here we see that the cost for coch sweater, dellvered to the warchouse of our monogramming subcontractor, is $59.83. This peice is valid for any quantty that we arder above 5,000 sweaters. This arder can be a mix of sweaters around Aprill 1 far the upcoming fontball scasan. Exhibit 20.12 Exhibit 20.13 326 sweaters were sold through eEay for $48 each the customer parys shipping on all orders). =i=1Ni2 Our monogramming subcentractor gcts $14 for cach sweater. Shipping cost is paid by the customer when the order is placed. In addition to the cost data, you also have some demand information, as shown in Exhlait 20:3. The exact sales numbers for last year are given. The exhibit indicates the retail or "full price" sales for the sweaters that were sald for $122 coch. Sweaters that we had at As for advertising the sweaters foc next scason. Rhonda is committed to using the same approach used inst year. The firm giaced ads As tor advertising the sweaters for next scasan, khanda is committed to uing the same approach used last year. The firm placed ads might be ways to advertise that would open sales to more alumn. She has hired a market research firm to help identify other advertising outiets but has decided to wait at least another year to try something different. Forccasting demand is a major probiem for the company. You have asked Rhanda and Steve to predict what they think sales might be next year. You have also asked the market research firm to apply their forecasting took. Data on these forecasts are given in Exhibit 20.13. To generate some statistics you have averaged the forecasts and calculated the standard deviation for cach school and in total. Eased an advice from the market research firm, you have decided to use the apgregate demand forecast and standard deviation for the aggregate demand. The aggregate demand was calculated by adding the average forecast for each item. The aggregate standard deviation was calculated by squaring the standard deviation for each item (this is the variance) summing the variance for each item, and then taking the square root of this sum. This assumes that the demand for eoch school is independent, meaning that the demand for Ohio State is totally unrelated to the demand at Michigan and the other schools. You will allocate your aggregate order to the individual schools based on their expected percentage af total demand. You discussed your analysis with thonda and Steve and thing each scheol was considered ind widually. You are curious as to how much finonda and Stewe mode in their business last yeor. You do not have all the data, but you know that. most of their expenses reiate to buying the sweaters and having them monogrammed. You know they paid themselves $50,000 each and you know the rent, utilities, insurance, and a benefit package for the business was about $24,000. They are paying you $40,000 and you expect your benefit package addition wauld be about $2,000 per year. Assume that they arder he angregate forecast. a. What is the expected pretax profit for this year, after deducting saiary and overhead? Use average forecast for each school. A5sume an EBay. (Round your answer to the nearest dollar amount. b. If they must pay 50% in taves after deducting their venture capital firm payment, haw much do you expect their business cash to increase this year? (Round your answer to the nearest dollar amount.) Qig10sweaters.com is a new company started last yoar by two recent college graduates. The itea behind the company was simple. They will seil premium lago sweaters far Big Ten colleges with one majoe, unique feature. This unique feature is a special large alumni, particularly avid football fars who want to show support during the football season. The company is off to a great start and had a successful first year while sailing to anly a few schools. This year they plan to expand to a few more schnols and target the entire ig Ten Conference within three years. You have been hired by eigtosweaters.com and need to make a goed impression by making good supply chain decisions. This is your aig opportunity with a startup. There are only two people in the firm and yoe were hired with the prospect of possibly becoming a was getting into Internet sales. The experience was great, but now you are on your awn and have none of the great support that the big comparry had. You need to find and analyze your own data and make same big decisiors. Of course, Rhanda and Steve, the partners who started the company, are knowiedgeable about this venture and they are going to help along the way. Ahenda had the idea to start the company two years ago and talked her friend from business school, Steve, into joining hec. Rhanda is as a techic. She can really make the website sing. ta some small venture capital people in the area. Last year, he was successful in getting them to invest $2,000,000 in the company (a could go investmenti, There were some significant strings attached to this investment in that it stipulated that only $100,000 per year addition, the venture capital company gets 21 percent of the company profits, before tawes, during the first four yeas of operation assuming the company makes a proff. Yaur first job is to focus an the firm's impntory. The company is centered on selling the premium sweaters to college football fans through a website. Your analysis is important since a significant portion of the company's assets is the inventory that it carries. The business is cyclic, and sales are cancentrated during the period leading up to the college foothall season, which runs between the Midwest region of the United States. In particular, they are targeting The Ohio State University (OSUJ, the University of Michigan (UM. Michigan State University (MSU). Purdue Unhersity (PU), and Indiana University (IU). These ftwe schools have major foatali programs and a loyal fan base. The firm has considered the idea of making the sweaters in their own factory, but for now they purchase them from a supplier in China. The peices are great, but service is a prablem since the suppler has a 20 -week lead time for cach order and the minimum arder size is and 250 for 1U. Within each logo sub lot, sizes are allocated based on percentages and the suppler suggests 20 percent X-large, 50 percent large, 20 percent medium, and 10 percent small based an their histerical data. Once an order is received, a local subcontractoe agples the monograms and ships the sweaters to the customer. They store the invertory of sweaters for the compary in a smail warchouse area located at the subcontroctoe. This is the company's second year of aperation. Last year they only sald sweaters for three of the schools, OSU, UM, and PU. They ardered the minimum 5,000 sweaters and said al of them, but the experience was painful since they had too many UM sweaters and sold at a steep discount on eBay after the season. They were hoping not to do this again purchased from the supplier in China. Here we see that the cost for coch sweater, dellvered to the warchouse of our monogramming subcontractor, is $59.83. This peice is valid for any quantty that we arder above 5,000 sweaters. This arder can be a mix of sweaters around Aprill 1 far the upcoming fontball scasan. Exhibit 20.12 Exhibit 20.13 326 sweaters were sold through eEay for $48 each the customer parys shipping on all orders). =i=1Ni2 Our monogramming subcentractor gcts $14 for cach sweater. Shipping cost is paid by the customer when the order is placed. In addition to the cost data, you also have some demand information, as shown in Exhlait 20:3. The exact sales numbers for last year are given. The exhibit indicates the retail or "full price" sales for the sweaters that were sald for $122 coch. Sweaters that we had at As for advertising the sweaters foc next scason. Rhonda is committed to using the same approach used inst year. The firm giaced ads As tor advertising the sweaters for next scasan, khanda is committed to uing the same approach used last year. The firm placed ads might be ways to advertise that would open sales to more alumn. She has hired a market research firm to help identify other advertising outiets but has decided to wait at least another year to try something different. Forccasting demand is a major probiem for the company. You have asked Rhanda and Steve to predict what they think sales might be next year. You have also asked the market research firm to apply their forecasting took. Data on these forecasts are given in Exhibit 20.13. To generate some statistics you have averaged the forecasts and calculated the standard deviation for cach school and in total. Eased an advice from the market research firm, you have decided to use the apgregate demand forecast and standard deviation for the aggregate demand. The aggregate demand was calculated by adding the average forecast for each item. The aggregate standard deviation was calculated by squaring the standard deviation for each item (this is the variance) summing the variance for each item, and then taking the square root of this sum. This assumes that the demand for eoch school is independent, meaning that the demand for Ohio State is totally unrelated to the demand at Michigan and the other schools. You will allocate your aggregate order to the individual schools based on their expected percentage af total demand. You discussed your analysis with thonda and Steve and thing each scheol was considered ind widually. You are curious as to how much finonda and Stewe mode in their business last yeor. You do not have all the data, but you know that. most of their expenses reiate to buying the sweaters and having them monogrammed. You know they paid themselves $50,000 each and you know the rent, utilities, insurance, and a benefit package for the business was about $24,000. They are paying you $40,000 and you expect your benefit package addition wauld be about $2,000 per year. Assume that they arder he angregate forecast. a. What is the expected pretax profit for this year, after deducting saiary and overhead? Use average forecast for each school. A5sume an EBay. (Round your answer to the nearest dollar amount. b. If they must pay 50% in taves after deducting their venture capital firm payment, haw much do you expect their business cash to increase this year? (Round your answer to the nearest dollar amount.)