Required: What factors will influence the level of inventory held in an organisation such as Superfry Limited?
Fantastic news! We've Found the answer you've been seeking!
Question:
Required:
What factors will influence the level of inventory held in an organisation such as Superfry Limited? Evaluate the importance of using inventory budgets to manage inventory levels at Superfry Limited.
Superfry Limited is concerned about product quality and customer satisfaction as well as making a profit. Consider whether Superfry Limited would find the use of a balanced scorecard helpful in performance measurement. Explain your answer.
Transcribed Image Text:
Superfry Limited is a new company that will produce and sell air fryers. The company will sell to three distinct types of customers: specialist kitchen shops, main supermarkets and other retailers. In June 2023, the business is expected to have the following sales revenues: Customer Type June sales revenue '000 Specialist kitchen shops 2 Main supermarket retailers 5 Other retailers 10 The following additional information is provided: (i) Market research has been conducted and the expected monthly compound sales growth is expected to be constant for the next four months as follows: Specialist kitchen shops: (!!) 5 per cent; Main supermarket retailers: 4 per cent; 3 per cent. Other retailers: In order to stimulate sales and meet sales growth targets, it has been decided to offer the following credit periods to customers: Specialist kitchen shops: 1 month; Main supermarket retailers: Other retailers: 2 months; (!!!) (iv) 3 months. Superfry Limited is a small business in the growing market for air fryers. The company currently has a small credit control department, with little or no experience in following up with any late payments from customers. Inventories of components used in the construction of air fryers are purchased from a local supplier with a lead time of 4 weeks on average. Superfry Limited is a new company that will produce and sell air fryers. The company will sell to three distinct types of customers: specialist kitchen shops, main supermarkets and other retailers. In June 2023, the business is expected to have the following sales revenues: Customer Type June sales revenue '000 Specialist kitchen shops 2 Main supermarket retailers 5 Other retailers 10 The following additional information is provided: (i) Market research has been conducted and the expected monthly compound sales growth is expected to be constant for the next four months as follows: Specialist kitchen shops: (!!) 5 per cent; Main supermarket retailers: 4 per cent; 3 per cent. Other retailers: In order to stimulate sales and meet sales growth targets, it has been decided to offer the following credit periods to customers: Specialist kitchen shops: 1 month; Main supermarket retailers: Other retailers: 2 months; (!!!) (iv) 3 months. Superfry Limited is a small business in the growing market for air fryers. The company currently has a small credit control department, with little or no experience in following up with any late payments from customers. Inventories of components used in the construction of air fryers are purchased from a local supplier with a lead time of 4 weeks on average.
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
3. A cantilever beam of length L = 2 m supports a load P = 10 kN. The beam is made of wood with cross sectional dimensions 150 mm 200 mm. Calculate the shear stresses due to the load P at points...
-
A firm is considering an investment in a new machine with a price of $16.7 million to replace its existing machine. The current machine has a book value of $6.4 million and a market value of $5.1...
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
Which one of the following statements related to investigations of workplace harassment complaints under Ontario's OHSA is true? a) As a rule, such investigations should be completed with 120 days of...
-
What are the principal benefits to MO Bank of becoming aligned with Mutual of Omaha Insurance Company, its parent company? Describe how the bank will take advantage of the parent companys businesses.
-
What circumstances indicated that Herrnkind had Royal Arcanum's authority to act on its behalf?
-
In the 1930s, when the SEC was created, it was not clear whether the SEC would simply set all accounting standards, or whether it would let the private sector, and private bodies of accountants, take...
-
On April 16, 2014, ColorCo purchased a put option for $800 on Choco common stock. The put option gives ColorCo the option to sell 5,000 shares of Choco at a strike price of $25 per share for a period...
-
A fire on January 31 destroyed some of a sole trader's inventory and its inventory records. The following information is available: $ Inventory January 1 320,000 Sales for January 620,000 Purchases...
-
What do you agree on and what to you disagree on in terms of where you placed focus in the consumer behavior process of this classmate post. give an opinion Support your points by outside sources....
-
Adwoa uses special journals and a general journal. The following transactions occurred during Dec 2 0 2 3 . Dec 1 . Sold inventory on account for $ 3 , 1 5 0 , terms 2 / 5 , n / 3 0 . 3 . Purchased...
-
The strategic management process is key to the leadership of a company. Discuss what is involved in the leadership of this process and how it differs from the company's day-to-day management. Why is...
-
4. Discuss how the just-in-time manufacturing strategy can still operate effectively under uncertain market conditions or can it (e.g., in a time of extraordinary upheaval in the global economy due...
-
Circle Corporation issued 5 - year, 9 % bonds with a face value of $ 2 0 0 , 0 0 0 on October 1 for $ 1 7 6 0 0 0 calculate discount on bond.
-
The charges to Work in Process-Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the beginning of...
-
Question a GoGoAUCity Inc. plans to issue a perpetual callable bond that pays 11.39% annual coupons. The current interest rate is 8%. Two years later, there is 16% probability that the interest rate...
-
Kenneth Hubbard has prepared the following list of statements about managerial accounting and financial accounting. 1. Financial accounting focuses on providing information to internal users. 2....
-
The Mission Company Ltd, whose year-end is 31 December, has acquired two items of machinery on leases, the conditions of which are as follows: Item Y: Ten annual instalments of 20,000 each, the first...
-
Peter Mullen says in an article sent in to the ASB, the following: the ASB advocates that all leasing type deals should essentially be accounted for in relation to the extent of asset and liability...
-
(a) When accounting for finance leases, accountants prefer to overlook legal form in favour of commercial substance. Required: Discuss the above statement in the light of the requirements of IAS 17...
Study smarter with the SolutionInn App