Big 10 Sweater Case Study Essay
1. Unit Unit Sales Sale Price Cost Revenue Cost Margin
Ohio 2,300 $120 73.88 $276,000 $169,924 $106,076
Michigan 1,468 $120 73.88 $176,160 $108,456 $67,704
Purdue 890 $120 73.88 $106,800 $65,753 $41,047 eBay 342 $50 60.88 $17,100 $20,821 ($3,721)
Totals 5,000 $576,060 $364,954 $211,106 Overhead: $120,000 Net Profit: $91,106
After paying 25% to the venture capital firm, $22,776.50, the net profit before taxes would be $68,329.50. Then after paying taxes of $34,164.75 they would be left with $34,165 of an increase in cash.
2. Aggregate demand forecasting is used by the company because the business is centered around the custom printing of the …show more content…
Additionally I would research using a different supplier, possibly one that is more local to the company. By finding a more local supplier they could potentially reduce their cost of materials as they might be able to pay less in fees associated with shipping the sweaters and by working direct with the supplier, avoid the duty insurance. Another advantage to working with a local supplier would be that they could reduce the lead time required to receive more sweaters making it easier to correct inventory levels should they run short on particular sweaters.
The company might also be able cut the cost of materials as well as monogramming by producing the sweaters entirely in house. They would eliminate the need for suppliers and contractors but I feel this plan should be explored with caution. As taking on these tasks would most likely require the need to purchase expensive equipment as well as present the company with the need to hire additionally skilled labor personnel to operate the