A small firm produces and sells automotive items in a five-state area. The firm expects to consolidate assembly of its battery chargers line at a single location. Currently, operations are in three widely scattered locations. The leading candidate for location will have a monthly fixed cost of $42,000 and variable costs of $3 per charger. Chargers sell for $7 each. Prepare a table that shows total profits, fixed costs, variable costs, and revenues for monthly volumes of 10,000, 12,000, and 15,000 units. What is the break-even point?

A small firm produces and sells automotive items in a five-state area. The firm expects to consolidate assembly of its battery chargers line at a single location. Currently, operations are in three widely scattered locations. The leading candidate for location will have a monthly fixed cost of $42,000 and variable costs of $3 per charger. Chargers sell for $7 each. Prepare a table that shows total profits, fixed costs, variable costs, and revenues for monthly volumes of 10,000, 12,000, and 15,000 units. What is the break-even point?

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 5.1SC: Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing...

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Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?
Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?
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Sonnie’s Gourmet Sandwich Café, a popular new fast casual restaurant, serves high-quality, made-to-order sandwiches. Located in a local outdoor shopping center, parking in front of Sonnie’s is limited. However, there are many parking spaces available behind the café within a five-minute walk. The café has an inviting, bright, and open interior with deli cases, blackboards listing specials, and oak tables and chairs. The café’s popularity at lunch is a concern for Sonnie. During the prime lunch time, between 11:30 a.m. and 1:30 p.m. Monday through Friday, the waiting line is often out the door. On average Sonnie would like to serve 40 customers per hour at lunch. Working professionals, who typically spend more than other customers at lunch, are on busy schedules and do not have time to wait in line. Sonnie estimates that currently some customers go to other restaurants because of the line. The menu at Sonnie’s includes nine standard sandwiches such as roast beef, pastrami and rye, and a…
Tsaltz Inc. of Hamilton, Ontario, is a distributor of starwars themed dog tags to pet store retailers. Its market area spans most of Ontario. The dog tags are made in Calgary, Alberta, and currently shipped to Ontario via motor carrier transportation. Easton, Director of Logistics, has asked his staff to evaluate using Rail car carrier service to ship the dog tags. He obtained the following data for you to make your recommendation which carrier is best for the company. Data: R= Annual rate of demand 5000 cases V= Value of cost of 1 unit of inventory $ 48.00 per case W= Carrying cost per dollar value of inventory per year 15% inventory carrying cost A= Cost of placing an order $ 37.50 cost per order In-transit inventory carry cost 9% Transit time using motor carrier (parcel ground) 2 days Transit time using Rail car carrier 1 days Motor carrier rate $ 0.66 per cwt (100 lbs) Rail car carrier rate $1.25 per cwt (100 lbs) Unit weight 25 pounds EOQ units 228.00 units EOQ pounts…
Determine how many products to ship from each factory to each warehouse, or from each factory to each warehouse and direct to each end customer, to minimize shipping cost while meeting warehouse demands and not exceeding factory supplies Explain the above scenario using the problem given below: Warehouse Capucity Factory w, W, W. (Supply) 21 16 25 13 F. F, 17 18 14 23 13 32 27 18 41 19 Requirement 6 (Demand) 10 12 15 43 Use least cost Method to solve the problem. Using Transportation method
Acadia Logistics anticipates that it will need more distribution center space to accommodate what it believes will be a significant increase in demand for its final-mile services. Acadia could either lease public warehouse space to cover all levels of demand or construct its own distribution center to meet a specified level of demand, and then use public warehousing to cover the rest. The yearly cost of building and operating its own facility, including the amortized cost of construction, is $15.00 per square foot. The yearly cost of leasing public warehouse space is $24.50 per square foot. E Click the icon to view the expected demand requirements. a. The expected value of leasing public warehouse space as required by demand is S (Enter your response as a whole number.) More Info Requirements (in sq. ft) Probability 230,000 430,000 630,000 830,000 0.35 0.4 0.2 0.05 Print Done
Acadia Logistics anticipates that it will need more distribution center space to accommodate what it believes will be a significant increase in demand for its final-mile services. Acadia could either lease public warehouse space to cover all levels of demand or construct its own distribution center to meet a specified level of demand, and then use public warehousing to cover the rest. The yearly cost of building and operating its own facility, including the amortized cost of construction, is $15.00 per square foot. The yearly cost of leasing public warehouse space is $24.50 per square foot. E Click the icon to view the expected demand requirements. a. The expected value of leasing public warehouse space as required by demand is $ 10290000 . (Enter your response as a whole number.) b. The expected value of building a 230,000-square-foot distribution center and leasing public warehouse space as required if demand exceeds the need for 230,000 square feet of space is $ (Enter your response…
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