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 year by two recent callege graduates. The idea behind the company was simple. They will seil premium lago sweaters far Big ien colleges with one majoc, 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 seiling to anly a few schools. This year they plan to expand to a few more schook and target the entire Big Ten Conference within three years. You have been hired by eigtosweaters.com and need to make a good impression by making goad supply chain decisions. This is your aig apportunity whth a startup. There are only two pecope in the tirm and you were hired with the prospect of possibly becoming a principai in the future. You majorcd in suppiy chain (operations) management in schoot and had a great interrahip at a big retailer that was geting into internet saics. The experience was great, but now you are on your awn and have none of the great alapart that the partners who started the company, are knowiedgeable about this venture and they are going to help along the way. Ghonda had the idea to start the company two years ago and talked her friend from business school, Steve, into joining her. Rhanda is into web marketing, has a degree in computer science, and has been woeking on completing an online MBA. She is as much an artist as a techie. She can realy make the weasite sing. Steve majored in accounting and likes to pump the numbers. He has done a great job of keeping the books and selling the campary to 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 anetime investmenti. There were some sigrificant strings attoched to this investment in that it stipulated that only $100,000 per year could go taward paying the salary of the two peincipals. The rest had to be spent on the website, advertising, and invertory. in addition, the venture capital company gets 25 percent of the company profits, before tawes, during the first four years of operatian assuming the company makes a protit. Your first jod is to idcus an the firm's irwentary. The company is centcred on sciling the premium sweaters to eallege iadball fans The business is cyclic, and saies are concentrated during the period leading up to the college foatball season, which runs between late August and the end of each year. For the upcoming season, the firm wants to sell sweaters to only a faw of the largest schools in the Midwest region of the United States. In particular, they are targeting The Ohio State University (OSU), the University of Michigan the Micwest region of the United States. In particular, they are targeting The Ohio State University (OSUJ, the University of Michigan programs and a loyal fan base. The firm has coraidered the idea of making the sweaters in their own factory, but for now they purchase them fram a supplier in China. The peices are great, but service is a problem since the supplier has a 20 -week lead time for each order and the minimum arder size is 5,000 sweaters. The arder can consist of a mix of the different lagos, such as 2,000 for OSU, 1,500 far UM, 750 for MSU, 500 far PU, percent large, 20 percent medium, and 10 percent small based on their histerical data. Once an order is received, a local subcontractor apples the monograms and ships the sweaters to the custamer. They store the imventory of sweaters for the compary in a smail warehouse area lacated at the subcontractoc. This is the company's second year af aperation. Last year they only sald sweaters for three of the schools, OSU, UM, and PU. They ardered the minimum S.000 sweaters and sold al of them, but the experience was paintul since they had too many UM sweaters and not conogh for OSU fans. Last year they ordered 2,380 OSU, 1,720 UM, and 900 PU sweaters For the next year, you have collected some data relevant to the decision. Exhibit 20.12 shaws coat information far the product when purchased from the supplier in China. Here we see that the cost for coch sweater, delivered to the warchouse of our monogramming subcontractor, is $40.99. This price is vald for any quantity that we order above 5,000 sweaters. This order can be a mix of sweaters around Aprill 1 far the upcoming fontbail scasan. Exhibit 20.12 Exhibit 20.13 446 sweaters were sold through eBay far $48 each (the customer pays shipping on all orders). * Calculated assuming the demand at each schnol is independent =i=1Nai2 Our monogramming subcentractor gets $13.50 for each sweater. Shipping cost is paid by the custamer when the order is placed In addition to the cost data, you also have same demand information, as shown in Exhibit 20s3. 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 $126 coch. Sweaters that we had at the end of the season were sold through eBay for $48 each and were not managrammed. Kcep in mind that the retain do not accurately refiect actual demand since they stocked out of the OSU sweaters toward the cond of the season. As for advertising the sweaters for next scason. Rhenda is committed to using the same approach used last year. The firm placed ads An the footboll program sold at each game. These worked very well for reaching those attending the games, but she realized there might be ways to advertise that would open sales to more alumni. 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. Forecasting demand is a majoe probiem for the company. You have asked Rhonda 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 each school and in total. Eased an advice from the market research firm, you have decided to use the aggregate 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 dewation was calculated by squaring the standard devation 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 each 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 indikidual schools based on their expected percentage af total demand. You discussed your analysis with Ahenda and Steve and You are Curious as to how much finconda and Steve mode in their business last year. You do not have all the data, but you know that and you know the rent, ut lities, insurance, and a benefit package for the business was about $24,000. a. What was the net pre-tax profit for their business last year, after deducting salary and averhead? (Do not round intermed iate caiculations. Round your answer to the nearest dollar amount) b. If they must pay 50% in tawes after deducting their venture capital firm payment, what was the increase in cash that their business accrued last year? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.) berued last year? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.)