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Hau Lee Furniture, Inc., spends 45% of its sales dollars in the supply chain and finds its current profit of $15,000 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 $20,000 so he can obtain the bank's approval for the loan. Current Situation Sales Cost of material $100,000 $45,000 (45%) Production costs Fixed cost Profit $25,000 (25%) $15,000 (15%) $15,000 (15%) a) What percentage improvement is needed in the supply chain strategy for profit to improve to $20,000? What is the cost of material with a $20,000 profit? A decrease of 11.1 % in material (supply-chain) costs is required to yield a profit of $20,000, for a new material cost of $ 40000 . (Enter your response for the percentage decrease to one decimal place and enter your response for the new material cost as a whole number.) b) What percentage improvement is needed in the sales strategy for profit to improve to $20,000? What must sales be for profit to improve to $20,000? An increase of 0.05% in sales is required to yield a profit of $20,000, for a new new level of sales of $105000. (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 45% of its sales dollars in the supply chain and finds its current profit of $15,000 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 $20,000 so he can obtain the bank's approval for the loan. Current Situation Sales Cost of material $100,000 $45,000 (45%) Production costs Fixed cost Profit $25,000 (25%) $15,000 (15%) $15,000 (15%) a) What percentage improvement is needed in the supply chain strategy for profit to improve to $20,000? What is the cost of material with a $20,000 profit? A decrease of 11.1 % in material (supply-chain) costs is required to yield a profit of $20,000, for a new material cost of $ 40000 . (Enter your response for the percentage decrease to one decimal place and enter your response for the new material cost as a whole number.) b) What percentage improvement is needed in the sales strategy for profit to improve to $20,000? What must sales be for profit to improve to $20,000? An increase of 0.05% in sales is required to yield a profit of $20,000, for a new new level of sales of $105000. (Enter your response for the percentage increase to one decimal place and enter your response for the new sales as a whole number.)

Marketing
Marketing
20th Edition
ISBN:9780357033791
Author:Pride, William M
Publisher:Pride, William M
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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Hau Lee Furniture, Inc., spends 45% of its sales dollars in the supply chain and finds its current profit of $15,000 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 $20,000 so he can obtain the bank's approval for the loan. Current Situation Sales Cost of material $100,000 $45,000 (45%) Production costs Fixed cost Profit $25,000 (25%) $15,000 (15%) $15,000 (15%) a) What percentage improvement is needed in the supply chain strategy for profit to improve to $20,000? What is the cost of material with a $20,000 profit? A decrease of 11.1 % in material (supply-chain) costs is required to yield a profit of $20,000, for a new material cost of $ 40000 . (Enter your response for the percentage decrease to one decimal place and enter your response for the new material cost as a whole number.)
Transcribed Image Text:Hau Lee Furniture, Inc., spends 45% of its sales dollars in the supply chain and finds its current profit of $15,000 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 $20,000 so he can obtain the bank's approval for the loan. Current Situation Sales Cost of material $100,000 $45,000 (45%) Production costs Fixed cost Profit $25,000 (25%) $15,000 (15%) $15,000 (15%) a) What percentage improvement is needed in the supply chain strategy for profit to improve to $20,000? What is the cost of material with a $20,000 profit? A decrease of 11.1 % in material (supply-chain) costs is required to yield a profit of $20,000, for a new material cost of $ 40000 . (Enter your response for the percentage decrease to one decimal place and enter your response for the new material cost as a whole number.)
b) What percentage improvement is needed in the sales strategy for profit to improve to $20,000? What must sales be for profit to improve to $20,000? An increase of 0.05% in sales is required to yield a profit of $20,000, for a new new level of sales of $105000. (Enter your response for the percentage increase to one decimal place and enter your response for the new sales as a whole number.)
Transcribed Image Text:b) What percentage improvement is needed in the sales strategy for profit to improve to $20,000? What must sales be for profit to improve to $20,000? An increase of 0.05% in sales is required to yield a profit of $20,000, for a new new level of sales of $105000. (Enter your response for the percentage increase to one decimal place and enter your response for the new sales as a whole number.)
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