Question #2 - Mark-Up & Discounts Levi's LIMITED *macy's TIME OFFER Macy's purchases model 505 straight-leg, blank ink denim jeans for women from Levis Straus & Co and sells them to consumers in 185 store locations across 35 U.S. states. Levis Straus & Co's cost-of-goods-sold for each pair of these model 505 straight-leg, blank ink denim jeans for women is $21.85. Levis Straus & Co sells these model 505 jeans to Macy's for $34.50 each. Macy's in-turn sells each pair of these jeans to consumers for a suggested retail price of $58.49. What is Macy's mark-up, is SUS dollars and %. on each pair of model 505 straight leg, blank ink denim jeans for women from Levis Straus & Co sold at the suggested retail price? Assume Macy's includes model 505 straight-leg, blank ink denim jeans for women from Levis Straus & Co in the end-of-year sale (November 15 to December 31:9 when every item in the store is discounted by 17.5% off the suggested retail price. What is the discounted price Macy's customers will pay for model 505 straight-leg, blank ink denim jeans for women from Levis Straus & Co? What is Macy's revised Mark-Up % after applying the 17.5% discount? Assume Macy's sells-through a quantity of 21,333 model 505 straight-leg, blank ink denim jeans for women at the discounted price during the end-of-year sale. What is the total revenue and, separately, gross margin in SUS dollars, for Levis Straus & Co? What is the total revenue and, separately, mark-up in SUS dollars, for Macy's? Question #3 - Discounts, Allowances and Free Goods Understanding Alternative Promotional Choices Coors You are a sales representative for MillerCoors and have a prospective distributor, Vice-President of Product Planning Megan Thomson at Rocky Mountain Inc., who is interested in carrying your Coors Banquet line. Megan has asked for free cases of Coors Banquet for initial distribution and samples for her sales personnel who sell to the restaurants, grocery stores, and bars providing Coors Banquet to your end consumer customers. Megan's specific ask is for five (5) free cases for each of the 1,488 warehousing operations Rocky Mountain Inc. manages across the United States. Your selling price is $12.43 to the distributor, and your gross margin is 24.5%. What size order (quantified in both SUS dollars and # of cases) in addition to the initial free goods must you secure from Rocky Mountain Inc. just to break even on this agreement? When you propose this to your sales manager, Sarah Sayamuri, she suggests that you simply provide Rocky Mountain Inc. a flat $78,250 slotting allowance to cover Rocky Mountain Inc.'s initial distribution cost, and that Megan purchase the stocking amounts right away to stock the warehouses. Is this a better solution? If so, by how much, and why? Does your assessment of the slotting allowance approach change if Sarah's suggested amount is reduced by $10,000 to $68,250? In this reduced slotting allowance scenario, and assuming Rocky Mountain Inc. still requires five (5) cases for each of the 1,488 warehouses, what is MillerCoors' net cost for the Coors Banquet line introduction? Question #7 - Retailer Cost-of-Goods Sold, Selling Price, Revenue, and Mark-Up EVERY SEASON STARTS AT DICK S fitbit SPORTING GOODS You are 30 minutes into your final one-hour interview for a sales specialist role working for the San Francisco headquartered health and fitness company Fitbit. Everything has gone smoothly and you can feel your excitement building at the prospect of accepting a dream job working for a cool company on the west coast. During the earlier phases of the interview process, your hiring manager, Winston Ono, made it clear that success in sales roles at Fitbit required analytic skills. He also set your expectations that a few "math" questions would likely be a part of your final interview with his manager, Regional Vice-President LaShonda Jones. LaShonda has just handed you a sheet of paper with the below problem. She tells you to write your approach and solution on the white board in the interview room. Dick's Sporting Goods, the retail chain that you will be assigned for the first several months of your sales training period, buys Fitbit's most popular product from you at $39.99, and takes a mark-up of 74.5%. What is the selling price of the product to the consumer? What would Dick's total revenue and mark-ap, in SUS dollars, be if the retailer sold 50,000 Fitbit units during the next twelve months in all stores combined across the US? Insert Table Chart Text Shape Media Comment Question #5 - Return on Investment (ROI) Understanding ROI Over Time SAP BW You are a global account sales executive for the German software company SAP dedicated to meeting your annual sales goals while creating sustained value with a single client, Dell Computer. Following several months of analysis that you initiated involving both SAP and Dell team members, Dell's newly appointed Vice-President of Manufacturing Operations Nancy Lee-Barat is considering purchasing and installing a sophisticated software solution from SAP. The new system analyzes and eliminates plant expenses related to shrink (waste) due to defective parts in Dell's laptop and tablet computer assembly facility in Round Rock, TX. The annual cost of this waste in Dell's manufacturing operation is $790,150 per year. Your SAP software solution takes roughly one year to implement (during which Dell will not benefit from reduced shrink). Once Dell employees are trained and using the software, experience with other customers (including Lenovo and Hewlett-Packard) indicates that this shrink will be completely eliminated. The cost of your software is $884,500 plus training costs of $97,500 in the first year. What would be Dell's ROI (quantified in both SUS dollars and %) for the investment over the three-year period? Question #4 - Break-Even Analysis Demonstrating Break-Even and Payout Burnham You are an outbound tele-sales representative for Midwest Packaging and Container responsible for new customer acquisition in the high-tech manufacturing sector across the Midwest. With the end of the fiscal quarter fast approaching, you have been focused on closing your largest ever opportunity at Burnam Bits Corporation. Getting the deal across the finish line this month is extremely important: you forecasted the revenue as "100%" for the quarter to your sales manager Stone Gossard; and the sales commission will pay for the furniture you and your new spouse purchased on credit last month for your new apartment. Edward Vedder, Burnam Bit's Senior Director of Operations, has been your primary contact and confirmed, through your extensive qualification process, as the final decision maker. Following several discussions, information exchange, a successful call to one of your best reference customers, and assessment of a comprehensive proposal you presented in a 60-minute Skype video conference last week, Edward appears ready to purchase your packaging machine. Somewhat unexpectedly, Edward sent you an email late last night requesting a final confirmation of the numbers supporting his economic business case to move forward. Your solution will reduce the cost of inserting, sealing, and pricing his product. The machine and tooling will cost Bumam Bits $335,500, plus installation fees of $77,750. Previously, Edward expressed confidence Burnam Bits will be able to reduce the per package cost by $0.226 per package with your solution. Burnam Bits runs 55,585 packages per day through this particular line. What is the number of manufacturing days Burpam Bits must run to fully recover Edward's investment, but not make a profit