Hau Lee Furniture, Inc., spends 50% of its sales dollars in the supply chain and finds its current profit of $28,000 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 $33,000 so he can obtain the bank's approval for the loan. Current Situation Sales $140,000 Cost of material $70,000 (50%) Production costs $28,000 (20%) Fixed cost $14,000 (10%) Profit $28,000 (20%) Part 2 a) What percentage improvement is needed in the supply chain strategy for profit to improve to $33,000? What is the cost of material with a $33,000 profit? A decrease of enter your response here% in material (supply-chain) costs is required to yield a profit of $33,000, for a new material cost of $enter your response here. (Enter your response for the percentage decrease to one decimal place and enter your response for the new material cost as a whole number.) Part 3 b) What percentage improvement is needed in the sales strategy for profit to improve to $33,000? What must sales be for profit to improve to $33,000? An increase of enter your response here% in sales is required to yield a profit of $33,000, for a new new level of sales of $enter your response here. (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 50% of its sales dollars in the supply chain and finds its current profit of $28,000 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 $33,000 so he can obtain the bank's approval for the loan. Current Situation Sales $140,000 Cost of material $70,000 (50%) Production costs $28,000 (20%) Fixed cost $14,000 (10%) Profit $28,000 (20%) Part 2 a) What percentage improvement is needed in the supply chain strategy for profit to improve to $33,000? What is the cost of material with a $33,000 profit? A decrease of enter your response here% in material (supply-chain) costs is required to yield a profit of $33,000, for a new material cost of $enter your response here. (Enter your response for the percentage decrease to one decimal place and enter your response for the new material cost as a whole number.) Part 3 b) What percentage improvement is needed in the sales strategy for profit to improve to $33,000? What must sales be for profit to improve to $33,000? An increase of enter your response here% in sales is required to yield a profit of $33,000, for a new new level of sales of $enter your response here. (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...
Related questions
Question
Hau Lee Furniture, Inc., spends
50%
of its sales dollars in the supply chain and finds its current profit of
$28,000
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
$33,000
so he can obtain the bank's approval for the loan.|
|
Current Situation
|
|
Sales
|
$140,000
|
|
Cost of material
|
$70,000
(50%)
|
|
Production costs
|
$28,000
(20%)
|
|
Fixed cost
|
$14,000
(10%)
|
|
Profit
|
$28,000
(20%)
|
Part 2
a) What percentage improvement is needed in the supply chain strategy for profit to improve to
$33,000?
What is the cost of material with a
$33,000
profit?A decrease of
enter your response here%
in material (supply-chain) costs is required to yield a profit of
$33,000,
for a new material cost of
$enter your response here.
(Enter your response for the percentage decrease to one decimal place and enter your response for the new material cost as a whole number.)Part 3
b) What percentage improvement is needed in the sales strategy for profit to improve to
$33,000?
What must sales be for profit to improve to
$33,000?
An increase of
enter your response here%
in sales is required to yield a profit of
$33,000,
for a new new level of sales of
$enter your response here.
(Enter your response for the percentage increase to one decimal place and enter your response for the new sales as a whole number.)Expert Solution
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