Two competing food vendors were located side by side at a state fair. Both occupied buildings of the same size, paid the same rent, Kshs 1,250, and charged similar prices for their foods. Vendor a employed three times as many employees as B and had twice as much income as B even though B had more than half the sales of A. Other data are as follows: Vendor A Vendor B Sales Kshs 8,000 Kshs 4,500 Cost of goods sold 50% of Sales 50% of Sales Wages Kshs 2,250 Kshs 750 You are required to answer the following: Explain why vendor A is twice as profitable as Vendor By how much would vendor B’s sale have to increase in order to justify the doubling of the number of employees at the same rate of pay if B’s desired operating income is Kshs 350?

Two competing food vendors were located side by side at a state fair. Both occupied buildings of the same size, paid the same rent, Kshs 1,250, and charged similar prices for their foods. Vendor a employed three times as many employees as B and had twice as much income as B even though B had more than half the sales of A. Other data are as follows: Vendor A Vendor B Sales Kshs 8,000 Kshs 4,500 Cost of goods sold 50% of Sales 50% of Sales Wages Kshs 2,250 Kshs 750 You are required to answer the following: Explain why vendor A is twice as profitable as Vendor By how much would vendor B’s sale have to increase in order to justify the doubling of the number of employees at the same rate of pay if B’s desired operating income is Kshs 350?

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

ChapterC: Cases

Section: Chapter Questions

Problem 5.3SD: Scenario 4 Sharon Gillespie, a new buyer at Visionex, Inc., was reviewing quotations for a tooling...

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