Alternatives could mario consider to reduce costs

Assignment Help Operation Management
Reference no: EM132557148

Introduction: Before responding to this question, please review the relevant sections on accounts receivable in the textbook as well as the video, What is supply chain management? (ASU-WPC-SCM) assigned in this module.

Description: Mario Lopez owns MLWS, a window and siding company that employs installers and an office staff that includes an administrative assistant plus two full time accounts receivable clerks. He would like to reduce his overhead costs so he might outsource his receivables function. His two full time receivables clerks earn $27,000 each plus 25% fringe benefits. Variable costs he estimates at $10. Mario was approached by Accounts Receivable Enterprise (ARE) offering to manage his receivables at a fixed cost of $50,000 per year plus $30 per account receivable. Next year, Mario expects to have 1,500 accounts receivable.

1. What would be the cost to MLWS of continuing to process accounts receivable in-house?

2. What would be the cost to MLWS of moving the accounts receivable to ARE?

3. If you could negotiate one or the other but not both of ARE's fixed or per account receivable costs, which would you choose, and why?

4. What other alternatives could Mario consider to reduce costs, and how would those alternatives impact the other company employees?

Reference no: EM132557148

Questions Cloud

Question - Calculating Manufacturing Overhead Rates : Question - Calculating Manufacturing Overhead Rates. Calculate the plantwide manufacturing overhead rate using machine hours as the allocation base
Prepare general journal entry in books of compak finance ltd : Prepare general journal entries in the books of Compak Finance Ltd for the year ended 30 June 2020. assuming the lease is a ?nance lease.
Describe their essential inventory characteristics : Determine the types of inventories these companies currently manage and describe their essential inventory characteristics.
How would you respond to michael and serve as advocate : Ann and Michael have been married for 55 years. Ann is 80 years-old, and suffers from lung cancer and advanced Alzheimer's disease. She currently resides.
Alternatives could mario consider to reduce costs : What other alternatives could Mario consider to reduce costs, and how would those alternatives impact the other company employees?
Record the lease of the forklift truck : Record the lease of the forklift truck, including the initial payment of $4000 and the first lease instalment of $2000, in the books of the lessor.
Explain why you selected the given theories : Review the media Clinical Interview: Intake, Assessment, & Therapeutic Alliance in your Learning Resources. Explain why you selected these theories.
Advise john davis of his assessable distribution income : Assuming that none of the entities above was a base rate entity in the 2019/2020 year, advise John Davis of his assessable distribution income
Where should the money be invested to earn higher return : Assuming you currently have MYR500,000 that can be invested for 3 months, where should the money be invested to earn higher return?

Reviews

Write a Review

Operation Management Questions & Answers

  Book review - the goal

Operations Management is about a book review. Title of the book is "Goal". This book has been written by Dr. Eliyahu Goldartt. The book has been appreciated by many as one of those books which offers an insight into the operations and strategic capac..

  Operational plan in hospitality enterprise

Operational plan pertaining to a hospitality enterprise is given in detail in the solution. The operational plan is an important plan or preparation which gives guidelines regarding the role and responsibilities of each and every operation at all lev..

  Managing operations and information

Recognise the importance of a strategic approach to the development and deployment of organisational information systems. Demonstrate an understanding of the importance of databases and their integration to the organisation's overall information mana..

  A make-or-buy analysis

An analysis of the holding costs, including the appropriate annual holding cost rate.

  Evolution and contributor of operations management

Briefly explain Evolution and contributor of Operations management.

  Functions and responsibilities of an operations manager

A number of drivers of change have transformed the roles, functions and responsibilities of an operations manager over recent years. These drivers have not only been based on technological innovations but also on the need for organisations to develop..

  Compute the optimal order quantity

Compute the Optimal Order quantity of DVD players. Determine the appropriate reorder point.

  Relationship to operations practice in the organisation

Evaluate problems in operations and identify approaches to overcoming them. Critically evaluate operating plans and identify areas for improvement. Justify, implement and evaluate changes to operations in line with modern approaches.

  A make or buy analysis

Develop a report for Figi Fabricating that will address the question of whether the company should continue to purchase the part from the supplier or begin to produce the part itself.

  Prepare a staffing plan

Prepare a staffing plan showing the change of your unit from medical/surgical staffing to oncology staffing.

  Leadership styles in different organizations

Ccompare the effectiveness of different leadership styles in different organizations

  Risk management tools and models

Be able to understand the concept of risk, roles and responsibilities for risk management and risk management tools and models.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd