Case Problem: Specialty Toys
1. From the Case, Management team recommends ordering quantities of 15,000; 18,000; 24,000 and 28,000.
Expected sales price = $24 per unit
Product cost = $16 per unit
And surplus products will be sold for $5 per unit
Sales forecaster predicts demand = 20,000 units with a 0.95 probability that demand would be between 10,000 and 30,000 units.
Let T be the demand for specialty’s toy. Based on normal distribution above with mean µ = 20,000 and standard…
Let’s say that we have calculated effectiveness (assuming PD=0,8; PA=0,9; PI=0,6; PN=0,4) and it equals to 0,8 x 0,9 x 0,6 x 0,4 =0,1728.
Remember, the conditional risk formula?
Assuming again, that probability of attack and relative consequences both equal 1,0, conditional risk R= 1,0 x (1 – 0,1728) x 1,0 = 0,8272 ( or we can say that the risk equals 83% if rounded).
Is it a lot? It depends on conversion table we will use to present numerical value as adjectival. And what it is mean?
The companies sector is industrial goods and produces and sells farm and construction machinery. The three ratios that I believe are important in determining a company’s financial situation are the quick ratio, the inventory turnover ratio, and the net profit margin ratio.
To find the quick ratio, we add cash, cash equivalents, short term investments and current receivables and divide them by the current liabilities. I found that the quick ratio is 1.86, we use this to find the companies…
1. Will you need a loan to start or expand the center? If so, approximately how much? R: I might need a loan about $80,000.00 to start-up my new child-care.
2. What will the loan be used for? R: The loan will be used to purchase equipment and child development materials, facility improvements and repairs.
3. What sources will you use to obtain the loan? (Bank, credit union, state,…
There are four capital budgeting techniques and they all consist of a series of calculations and a set of decision rules. They will help you decide if you will lose money or will you make money on your project. The four budgeting techniques are Net Present Value (NPV), Profitability Index (PI), Internal Rate of Return (IRR), and Payback.
The first technique we will look at is NPV applies the idea that the present value of future cash flows is what counts when making decisions based on value.…
safety stock is 10 ATV’s. What is the Economic Order Quantity?
5- Find the Effective Annual Interest Rate given the following:
Max Payne is running a small business and is considering offering the following trade terms to free up cash: 2/10 net 40. What is the effective annual rate his customers will pay if they do not take the discount?
Answers To Week 3…
Notice that the reason for including the cash flows in Exhibit 6 is explained in detail in the “The Super Project”. In particular, should General Foods include the following or not? Discuss briefly.
a) Test market expenses;
b) Charges for the use of Jell-O agglomerator capacity;
c) Charges for erosion of Jell-O sales;
d) Overhead expenses;
Tip: Read Crosby Sandberg’s analysis in Appendix A carefully, and also the reply in Appendix B. And remember the discussions we had in class…
The newsvendor problem is a mathematical model which is used to determine the optimal stock under uncertainty. In the following, the newsvendor context under cost minimization will be introduced.
Let h be the unit holding cost respectively the unit overage cost (as we regard the pure cost context) and b the unit penalty of not serving demand (or unit backorder cost) respectively the unit underage cost. Then, the target inventory B is equal to the mean demand µ plus safety stock SS. The safety…
“Weekly Activity Summary” Flip chart Markers 10 minutes IV. Benefits of Personal Time Management
What are some benefits of personal time management? Record responses on the flip chart. According to Gerard Blair, author of “Personal Time Management for Busy Managers,” personal time management is a tool that can provide you with the following benefits: 1. Eliminate waste. Better evaluate what is needed to do and nice to do. If you have too much on your plate, the nice thing to do might have…