Find yourself faced with interesting situation

Assignment Help Operation Management

Reference no: EM132077853

As the operations manager for Valley Kayaks (as described in the previous question), you find yourself faced with an interesting situation. Marketing has informed you that they have lost a number of sales because of a lack of inventory. Kayaks, being seasonal in nature, have to be in stock at your dealers if they are to be sold (customers are not willing to wait). The director of marketing proposes that you increase inventories by 25 percent (a major investment to you). She has also given the information in the following table. How would you assess this proposal from marketing? Your top management requires that any change must achieve a ROA greater than 30%. Show your calculations and then determine if the projected change in ROA justify the inventory investment?

Category Current Values Estimated Impact of TQM

Sales $2,000,000 5% +(improvement)

Cost of good sold $1,500,000 0%

Variable expenses $300,000 8.25% - (reduction)

Fixed expenses $100,000 0%

Inventory $300,000 25% -

Accounts receivable $100,000 0%

Other current assets $500,000 0%

Fixed assets $400,000 0%

Reference no: EM132077853

Questions Cloud

Largest supplier of faucets for both commercial and home : CLARK FAUCET COMPANY BACKGROUND By 1999, Clark Faucet Company had grown into the third largest supplier of faucets for both commercial and home use.

Created the consumer financial protection bureau : Which of the following legislations created the Consumer Financial Protection Bureau (CFPB)?

The role of vice president of major organization : For this assignment, you will take on the role of a Vice President of a major organization.

Describe some of the company response strategies : Identify multiple business pressures on Xerox. Describe some of the company’s response strategies.

Find yourself faced with interesting situation : As the operations manager for Valley Kayaks (as described in the previous question), you find yourself faced with an interesting situation.

Developments in social networking technology : Developing Yumcha Version 2.0 Tan decided to leverage the emerging social networking trend, as well as developments in social networking technology,

Modern supply chain with traditional distribution channels : Compare and contrast the concept of a modern supply chain with more traditional distribution channels.

Reflect on theory and practice of appreciative inquiry : Reflect on the theory and practice of appreciative inquiry, vs. the traditional problem or deficit based organizational perspective.

Corporate culture-leadership-power and motivation affect : How did corporate culture, leadership, power and motivation affect Thomas’ level of managerial hubris?

User Account

All Pages