What percentage improvement is needed in sales strategy
Course:- Operation Management
Reference No.:- EM131146653

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Kamal Fatehl production manager of Kennesaw Manufacturing, finds his profit at $31,200 inadequate for expanding his business. The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment. Kamal would like to improve profit line to $41,200 so he can obtain the bank's approval for the loan

% of Sales

Sales $240,000 100%

Cost of supply chain purchases 156,000 65%

Other production costs 26,400 11%

Fixed Costs 26,400 11%

Profit 31,200 13%

a. What percentage improvement is needed in a supply chain strategy for profit to improve to $41,200? What is the cost of the material with a $41,200 profit? A decrease of ____% in supply chaing costs is required to uield a profit of $41,200 for a new cost of supply chaing purchases of $______.

b. What percentage improvement is needed in a sales strategy for a profit of $41,200? What must sales be for profit to improve to $41,200$. An increase of ____% in sales is required to yiled a profit of $41,200, for a new level of sales of $______.

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