You are the Manager of a business. It could be a retailer, distributor or manufacturer. You...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
You are the Manager of a business. It could be a retailer, distributor or manufacturer. You are contemplating increasing customer service from 95% to 98% for your business to better service your customers needs. This means, you will have the product available 98-percent of the time when a customer wants to purchase it. The following are estimated to happen in your business: Assumptions: Sales are currently $80.000,000 Labor would increase $34,000 Direct materials (one-time increase) $40,000 Transportation would increase $60,000 Rent would increase $18,000 to accommodate the additional space to store the inventory Inventory would increase by $3,000.000 Fixed overhead is $100,000 and does not need to be increased above its current level. Inventory carrying cost 25% Contribution Margin on the product 30% You will make the inventory permanent, meaning it will be stored for 365-days 1. If sales are projected to increase by 2%, would you spend the money to increase service levels? Why or why not? You must justify your answer with quantified analysis 2. If sales are projected to increase 8%, would you spend the money to increase service levels? Why or why not? You must justify your answer with quantified analysis. You are the Manager of a business. It could be a retailer, distributor or manufacturer. You are contemplating increasing customer service from 95% to 98% for your business to better service your customers needs. This means, you will have the product available 98-percent of the time when a customer wants to purchase it. The following are estimated to happen in your business: Assumptions: Sales are currently $80.000,000 Labor would increase $34,000 Direct materials (one-time increase) $40,000 Transportation would increase $60,000 Rent would increase $18,000 to accommodate the additional space to store the inventory Inventory would increase by $3,000.000 Fixed overhead is $100,000 and does not need to be increased above its current level. Inventory carrying cost 25% Contribution Margin on the product 30% You will make the inventory permanent, meaning it will be stored for 365-days 1. If sales are projected to increase by 2%, would you spend the money to increase service levels? Why or why not? You must justify your answer with quantified analysis 2. If sales are projected to increase 8%, would you spend the money to increase service levels? Why or why not? You must justify your answer with quantified analysis.
Expert Answer:
Answer rating: 100% (QA)
There are numerous sorts of trade models Each one changes significantly based on the sort of organiz... View the full answer
Related Book For
Managerial Economics and Business Strategy
ISBN: 978-0071267441
7th Edition
Authors: Michael R. baye
Posted Date:
Students also viewed these accounting questions
-
You are the manager of a large but privately held online retailer that currently uses 17 unskilled workers and 6 semiskilled workers at its warehouse to box and ship the products it sells online....
-
You are the manager of a retail electronics store. Recently, you purchased 200 What-A-Sound portable CD players from a wholesaler in a going-out-of-business sale. These units cost you $80 each, about...
-
You are the manager of a large but privately held online retailer that currently uses 17 unskilled workers and 6 semiskilled workers at its warehouse to box and ship the products it sells online....
-
Remove left recursion in the following grammar. Show each step. Hint: First remove direct left recursion. Then the indirect left recursion. A AB | Aab | BA| a Bb | | b
-
Buy Cartier Ltd. (BCL) is a Canadian public company that operates primarily in the commercial and recreational transportation sector. Worldwide, the commercial transportation business is growing...
-
Find the shaded areas. a) b) Y 3 2 1 0 1 2 y=x y=x (3-X) 3 X
-
A four stroke six cylinder engine with stroke volume of 1.75 litres develops \(26.25 \mathrm{~kW}\). The mean effective pressure is 6 bar. Find speed of the engine.
-
The following are the statements of financial position of two companies at 31 October 2018, the end of their most recent financial years: The following additional information is available: 1). On 1...
-
Gold coast organics has a total assets turnover of 2.5 and a net profit margin of 3.5 percent.the total debt ratio for the firm is 50 percent.calculate the gold coast organics return On equity.
-
Gulf Uniform Supply, Inc. (GUS), a merchandising business, is organized as a corporation. The business sells a complete line of uniforms for a variety of businesses and organizations, including...
-
The old adage is true: crime pays. Criminals bought two Mercedes-Benz automobiles, a mansion in suburban Chicago, a Myrtle Beach apartment, expensive clothes and tailored and monogrammed shirts for...
-
Compare the phases of the Unified Process with the phases of the waterfall model.
-
Milton Industries expects free cash flow of $18 million each year. Miltons corporate tax rate is 38%, and its unlevered cost of capital is 16%. Milton also has outstanding debt of $75.25 million, and...
-
What are the phases and workflows of the Unified Process?
-
Acme Storage has a market capitalization of $72 million and debt outstanding of $100 million. Acme plans to maintain this same debt-equity ratio in the future. Acme pays interest of 7.4% on its debt...
-
What does it mean for an OOSAD approach to be incremental and iterative?
-
Shift the graph 3 units to the right, Shrink the graph vertically by a factor of (1)/(2), Reflect the graph across the x-axis, Shift the graph upward 5 units. 0 answers
-
A company pledges their receivables so they may Multiple Choice Charge a factoring fee. Increase sales. Recognize a sale. Collect a pledge fee. Borrow money. Failure by a promissory notes' maker to...
-
Your store sells an item desired by a consumer. The consumer is using an optimal search strategy; the accompanying graph shows the consumer??s expected benefits and costs of searching for a lower...
-
The owner of an Italian restaurant has just been notified by her landlord that the monthly lease on the building in which the restaurant operates will increase by 20 percent at the beginning of the...
-
Pelican Point Financial Groups clientele consists of two types of investors. The first type of investor makes many transactions in a given year and has a net worth of over $1 million. These investors...
-
Go to the national statistics office website for your country (this could be the ONS in the UK or Eurostat for the EU) and look up unemployment and inflation figures over the last 30 years. Plot the...
-
Distinguish between planned expenditure and actual expenditure.
-
List and explain the three reasons why the AD curve is downwards sloping.
Study smarter with the SolutionInn App