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Hau Lee Furniture, Inc., spends 60% of its sales dollars in the supply chain and finds its current profit of $10,000 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 $25,000 so he can obtain the bank's approval for the loan. Current Situation Sales $100,000 Cost of material S60,000 (60%) $20,000 (20%) $10,000 (10%) S10,000 (10%) Production costs Fixed cost Profit a) What percentage improvement is needed in the supply chain strategy for profit to improve to $25,000? What is the cost of material with a $25,000 profit? A 25 % decrease in material (supply-chain) costs is required to yield a profit of $25,000, for a new material cost of $ 45000. (Enter your responses as whole numbers.) b) What percentage improvement is needed in the sales strategy for profit to improve to $25,000? What must sales be for profit to improve to $25,000? A % increase in sales is required to yield a profit of $25,000, for a new new level of sales of $ (Enter your responses as whole numbers.)

Hau Lee Furniture, Inc., spends 60% of its sales dollars in the supply chain and finds its current profit of $10,000 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 $25,000 so he can obtain the bank's approval for the loan. Current Situation Sales $100,000 Cost of material S60,000 (60%) $20,000 (20%) $10,000 (10%) S10,000 (10%) Production costs Fixed cost Profit a) What percentage improvement is needed in the supply chain strategy for profit to improve to $25,000? What is the cost of material with a $25,000 profit? A 25 % decrease in material (supply-chain) costs is required to yield a profit of $25,000, for a new material cost of $ 45000. (Enter your responses as whole numbers.) b) What percentage improvement is needed in the sales strategy for profit to improve to $25,000? What must sales be for profit to improve to $25,000? A % increase in sales is required to yield a profit of $25,000, for a new new level of sales of $ (Enter your responses as whole numbers.)

Practical Management Science
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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Hau Lee Furniture, Inc., spends 60% of its sales dollars in the supply chain and finds its current profit of $10,000 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 $25,000 so he can obtain the bank's approval for the loan. Current Situation Sales $100,000 S60,000 (60%) $20,000 (20%) $10,000 (10%) $10,000 (10%) Cost of material Production costs Fixed cost Profit a) What percentage improvement is needed in the supply chain strategy for profit to improve to $25,000? What is the cost of material with a $25,000 profit? A 25 % decrease in material (supply-chain) costs is required to yield a profit of $25,000, for a new material cost of $ 45000 . (Enter your responses as whole numbers.) b) What percentage improvement is needed in the sales strategy for profit to improve to $25,000? What must sales be for profit to improve to $25,000? A % increase in sales is required to yield a profit of $25,000, for a new new level of sales of $. (Enter your responses as whole numbers.)
Transcribed Image Text:Hau Lee Furniture, Inc., spends 60% of its sales dollars in the supply chain and finds its current profit of $10,000 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 $25,000 so he can obtain the bank's approval for the loan. Current Situation Sales $100,000 S60,000 (60%) $20,000 (20%) $10,000 (10%) $10,000 (10%) Cost of material Production costs Fixed cost Profit a) What percentage improvement is needed in the supply chain strategy for profit to improve to $25,000? What is the cost of material with a $25,000 profit? A 25 % decrease in material (supply-chain) costs is required to yield a profit of $25,000, for a new material cost of $ 45000 . (Enter your responses as whole numbers.) b) What percentage improvement is needed in the sales strategy for profit to improve to $25,000? What must sales be for profit to improve to $25,000? A % increase in sales is required to yield a profit of $25,000, for a new new level of sales of $. (Enter your responses as whole numbers.)
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