a)
To determine: The profit-leverage effect of decreasing the cost of the facilitating goods in this company.
Introduction:
The profit-leverage effect would reduce the inventory cost which would improve the profit of the firm. When the purchase cost reduces, the profit and sales would increase equally.
b)
To determine: The effect of reduction in the service cost when earning increases.
Introduction:
The profit-leverage effect would reduce the inventory cost, which would improve the profit of the firm. When the purchase cost reduces, the profit and sales would increase equally.
c)
To determine: The profit-leverage effect of in-house services that are related to the profits.
Introduction:
The profit-leverage effect would reduce the inventory cost which would improve the profit of the firm. When the purchase cost reduces, the profit and sales would increase equally.
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OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN: DECISIONS & CASES (Mcgraw-hill Series Operations and Decision Sciences)
- Based on the attached case study: kindly answer as detailed as possible Question 1 1.1 Provide an assessment of what Five(5) performance measures for Flame Electrical 1.2 Explain the most important of these performance measures for Flame Electrical 1.3 Evaluate the main reasons for Flame Electrical eventory. 1.4 Explain what seems to influence the stock management policy of Flame Electricalarrow_forwardWhen evaluating sales revenue which critical factor(s) must be considered? a) Number of operating meal periods or days b) Changes in menu prices, guest counts, and check averages c) Special events d) All of the abovearrow_forwardThe owner of a large machine shop has just finished its financial analysis from the prior fiscal year. Following is an excerpt from the final report: Net revenue $375,000 Cost of goods sold 322,000 Value of production materials on-hand 42,500 Value of work-in-process inventory 37,000 Value of finished goods on-hand 12,500 Compute the inventory turnover ratio (ITR). Note: Round your answer to 1 decimal place. Compute the weeks of supply (WS). Note: Do not round intermediate calculations. Round your answer to 1 decimal place.arrow_forward
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- Acme Steel Fabricators experienced booming business forthe past five years. The company fabricates a wide range ofsteel products, such as railings, ladders, and light structuralsteel framing. The current manual method of materials han-dling is causing excessive inventories and congestion. Acmeis considering the purchase of an overhead rail-mountedhoist system or a forklift truck to increase capacity and im-prove manufacturing efficiency.The annual pretax payoff from the system depends on futuredemand. If demand stays at the current level, the probabilityof which is 0.50, annual savings from the overhead hoist willbe $10,000. If demand rises, the hoist will save $25,000 annu-ally because of operating efficiencies in addition to new sales.Finally, if demand falls, the hoist will result in an estimatedannual loss of $65,000. The probability is estimated to be 0.30for higher demand and 0.20 for lower demand.If the forklift is purchased, annual payoffs will be $5,000if demand is unchanged,…arrow_forwardMiddleton Fine Furniture-Supply Chain Savings Opportunities* The furniture industry is a tough industry to complete in. It is a very price-driven business and every expense must be constantly reviewed and reduced as much as possible. Middleton Fine Furniture was feeling the pressure of the economic downturn and needed to cut expenses. If they could not accomplish this, the only alternative was to lay off employees. Sally Sherman was the chief executive officer of Middleton Fine Furniture. In its 100 years of operations, Middleton Fine Furniture was extremely proud of the fact that its employees were like family and Sally didn't feel layoffs were an option. Sally knew that until the economy turned around, her company would need to tighten its belt. However, Sally wanted more than immediate financial relief, she want sustainable cost reductions. Sally met with Kenisha Yost, chief financial officer, and Ellie Gomez, vice president of supply chain management to discuss Middleton's…arrow_forwardwrite a virtual chain for Amazon. give a brief description of its products.• Identify the core competency.• Briefly explain the business model.• Specify main competitive advantage.• Construct a diagram depicting a virtual chain for it, based on value chain model.arrow_forward
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