Hau Lee Furniture, Inc., spends 45% of its sales dollars in the supply chain and finds its current profit of $16,000 inadequate. The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment. Hau would like to improve the profit line to $21,000 so he can obtain the bank's approval for the loan. Sales Cost of material Current Situation $80,000 $36,000 (45%) Production costs Fixed cost Profit $16,000 (20%) $12,000 (15%) $16,000 (20%) a) What percentage improvement is needed in the supply chain strategy for profit to improve to $21,000? What is the cost of material with a $21,000 profit? A decrease of ☐ % in material (supply-chain) costs is required to yield a profit of $21,000, for a new material cost of (Enter your response for the percentage decrease to one decimal place and enter your response for the new material cost as a whole number.) b) What percentage improvement is needed in the sales strategy for profit to improve to $21,000? What must sales be for profit to improve to $21,000? An increase of ☐ % in sales is required to yield a profit of $21,000, for a new new level of sales of $ ☐ . (Enter your response for the percentage increase to one decimal place and enter your response for the new sales as a whole number.)
Hau Lee Furniture, Inc., spends 45% of its sales dollars in the supply chain and finds its current profit of $16,000 inadequate. The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment. Hau would like to improve the profit line to $21,000 so he can obtain the bank's approval for the loan. Sales Cost of material Current Situation $80,000 $36,000 (45%) Production costs Fixed cost Profit $16,000 (20%) $12,000 (15%) $16,000 (20%) a) What percentage improvement is needed in the supply chain strategy for profit to improve to $21,000? What is the cost of material with a $21,000 profit? A decrease of ☐ % in material (supply-chain) costs is required to yield a profit of $21,000, for a new material cost of (Enter your response for the percentage decrease to one decimal place and enter your response for the new material cost as a whole number.) b) What percentage improvement is needed in the sales strategy for profit to improve to $21,000? What must sales be for profit to improve to $21,000? An increase of ☐ % in sales is required to yield a profit of $21,000, for a new new level of sales of $ ☐ . (Enter your response for the percentage increase to one decimal place and enter your response for the new sales as a whole number.)
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Transcribed Image Text:Hau Lee Furniture, Inc., spends 45% of its sales dollars in the supply chain and finds its current profit of $16,000
inadequate. The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment.
Hau would like to improve the profit line to $21,000 so he can obtain the bank's approval for the loan.
Sales
Cost of material
Current Situation
$80,000
$36,000 (45%)
Production costs
Fixed cost
Profit
$16,000 (20%)
$12,000 (15%)
$16,000 (20%)
a) What percentage improvement is needed in the supply chain strategy for profit to improve to $21,000? What is the
cost of material with a $21,000 profit?
A decrease of ☐ % in material (supply-chain) costs is required to yield a profit of $21,000, for a new material cost of
(Enter your response for the percentage decrease to one decimal place and enter your response for the new
material cost as a whole number.)
Transcribed Image Text:b) What percentage improvement is needed in the sales strategy for profit to improve to $21,000? What must sales
be for profit to improve to $21,000?
An increase of ☐ % in sales is required to yield a profit of $21,000, for a new new level of sales of $ ☐ . (Enter your
response for the percentage increase to one decimal place and enter your response for the new sales as a
whole number.)
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