logistics excel exercise

SoccerBoss
Category:
Management
Price: $5 USD

Question description

Ron Mesia, Circuit City Supply Chain Manager finds his profit at $15,000 as shows below, he consider that it is inadequate for expanding his business. 

Bank of America is insisting on an improved profit picture prior to approval of a loan for some new equipment. Ron would like to improve the profit line to $25,000 so he can obtain the bank’s approval for the loan.

What percentage improvement is needed in a Cost of Material Strategy for the profit to improve to $25,000? Sales, Other Production Cost, and Fixed Cost will remain the same.

What percentage improvement is needed in Sales for the profit to improve to $25,000? Cost of Material, Other Production Cost, and Fixed Cost will remain the same.

Current Situation

% Distribution

Cost of Material Startegy 

Percent Increase or Decrease

Sales Strategy

Percent Increase or Decrease

Sales

$250,000

100%

250,000

0%

Cost of material (supply chain)

$175,000

70%

175,000

0%

Other production cost

$30,000

12%

30,000

0%

30,000

0%

Fixed cost

$30,000

12%

30,000

0%

30,000

0%

Profit

$15,000

6%

25,000

67%

25,000

67%


Tutor Answer

(Top Tutor) Daniel C.
(997)
School: UIUC
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