The average number of meals sold per month is 7,000. MBA Deli would like to increase its sales and profits. The MBAs running the Deli, know that if price is lowered, they will sell more meals. So they run an experiment. Price is lowered to $5 per meal in October and the number of meals sold increases to 8,000.
They would only end up losing a hundred dollars a week instead of more because if they hired three guards they would end up losing $250 (600-350). So it seems it would make sense to hire two guards. b.) The most the company would be willing to pay the first guard is $400 because if they don’t hire a security guard at all then they will lose $1,250 (25*50) a week and if they hire one security guard then they would only end up losing $750 (25*30), which is a $500 dollar difference. So if they pay one guard $400 at the most then they will still have saved themselves a hundred dollars.
Should you give any discount for people who order two dozen cookies, three dozen, or more ? If so, how much ? Will it take any longer to fill a two dozen cookie order than a one-dozen cookie order ? What we must first must recognize is that our only resource that might change with the order size is labor costs, because the costs of our ingredients are the same no matter how many dozen we bake. One dozen : Two dozen : Three dozen If we assume that our labor cost is the minimum wage of $7.25 per hour : As you can see 2 dozen orders does not cost twice as much as the one-dozen order, so we could be able to afford giving a discount for 2 dozen order or 3 dozen order.
Because it’s so complicated to change production at the facilities, from one type of pasta to the other, it’s not always easy to meet the fluctuating demand. This leads to stock outs levels in the area of five to nine percent. Barilla needs to find a way to lower stock out levels, while keeping inventory levels low. Criteria For this case, success will be defined as the ability of Barilla to smooth out the volume of their deliveries, so that they aren’t sending a given number of trucks one week, and triple as many the next week. In order to do this, they will need better forecasting.
However, continuing the 60% dividend has already prevented Bessemer from turning down positive NPV projects, and will continue to stunt other growth opportunities. When only considering future growth, cutting the dividend to 20, 30, or 40 percent would be a wise decision for Bessemer. Retained earnings would increase, allowing for increased investment, the addition of assets, and subsequently higher income. While this decision makes sense on that front, it would do nothing more than lead current shareholders to sell their shares. At present, Bessemer’s shareholders are hoping for a higher dividend and cutting it would only upset these shareholders.
The shadow price or dual value is $1.50 for each additional dollar Julia would increase her profit, if she borrows some money. However, the upper limit of the sensitivity range is $1,658.88, so she should only borrow $158.77 and her additional profit would be $238.32 or a total profit of $2488.32. (C) Evaluate the prospect of paying a friend $100/game to assist. Yes, she should hire her friend for $100/game for it is almost impossible for her to prepare all the food in such a short time. In order for Julia to prepare the hotdogs and barbeque sandwiches she would need the additional help.
If Maria’s suggestion would have been put in place it would have resulted in even better profits. Bulk Sales Aunt Connie’s Cookies have received a mass order of cookies to produce within a month’s time from a confectioner from Charlottes. They have to produce an order of a million packs if real mint cookies. Fortunately, Aunt Connie’s Cookies has the infrastructure to be able to meet such order, but the confectioner is willing to only pay $1.20
MONFORTE DAIRY Critical Issues In order to reach $2 million in annual sales in fiscal 2010 and position Monforte Dairy (Monforte) to become a $10 million revenue company while staying true to its values, Ruth Klahsen must determine: * How to reduce the accumulated financial debt, so that Monforte can reduce its high leverage and position itself for future expansion. * How to efficiently utilize production capacity, so that Monforte can capitalize on the anticipated growth in the artisanal cheese industry by meeting consumer demand. * How to effectively balance work and personal life, so that the most feasible growth option for Monforte can be implemented. Situation Analysis Monforte’s debt to equity ratio of 11.49 signifies that its assets are mainly financed with debt (Exhibit 2). With cash mainly coming from external financing activities rather then internal operations (Exhibit 3), Monforte will be unable to obtain financing from a bank for possible expansion opportunities.
The combined sales from these markets amount to a staggering 48.7 Billion. From the end customer view, the company must focus on small users with tanks less than 1,000 gallons. Positioning: Katham MWX needs to be positioned as the cost-effective solution to maintain machinery and extend the life of metal working fluid. Price: The large price differentials from the manufacturer all the way down to the small user suggests that pricing needs to be re-structured through all channels. Currently, Rohm & Haas enjoys a 75% margin, Formulators also get 75%, and dealers claim they can sell this product for $6/packet, which translates to a 400% margin.
The fair-trade shirts were $28.65 each, which is high. The site registers members for $30. If the site’s revenues are only based on membership fee and the number of members is low, it may not have any profit with the cost of $28.65 for each shirt. It is because the company also has fixed costs, such as salaries for employees and rents for the workplace. If the number of new members is very high, then these costs may be covered since average fixed cost declines with the increase of members.