>> Operation Management
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 $______.