6,750 MGT1218 Inventory & Materials Management Assignment 1 1. On the average, a company has a work-in-process lead time of 9 weeks and annual cost of goods sold of $30 million. Assuming that the company works 48 weeks a year and 5 days a week: a) What is the dollar value of the work-in-process? b) If the work-in-process could be reduced to 6 weeks and the annual cost of carrying inventory was 20% of the WIP inventory value, what would be the annual savings? 2. Amalgamated Fenderdenter's sales are $12 million. The company spends $3.7 million for purchase of direct materials and $3.4 million for direct labor; overhead is $3.5 million and profit is $1.4 million. Direct labor and direct material vary directly with sales, but overhead does not. The company wants to increase its profit by 50%. a) By how much should the firm increase annual sales? b) By how much should the firm decrease material costs? c) By how much should the firm decrease labor cost?

MGT1218 Inventory \& Materials Management Assignment 1 1. On the average, a company has a work-in-process lead time of 9 weeks and annual cost of goods sold of $30 million. Assuming that the company works 48 weeks a year and 5 days a week: a) What is the dollar value of the work-in-process? b) If the work-in-process could be reduced to 6 weeks and the annual cost of carrying inventory was 20% of the WIP inventory value, what would be the annual savings? 2. Amalgamated Fenderdenter's sales are $12 million. The company spends $3.7 million for purchase of direct materials and $3.4 million for direct labor; overhead is $3.5 million and profit is $1.4 million. Direct labor and direct material vary directly with sales, but overhead does not. The company wants to increase its profit by 50%. a) By how much should the firm increase annual sales? b) By how much should the firm decrease material costs? c) By how much should the firm decrease labor cost? MGT1218 Inventory \& Materials Management Assignment 1 1. On the average, a company has a work-in-process lead time of 9 weeks and annual cost of goods sold of $30 million. Assuming that the company works 48 weeks a year and 5 days a week: a) What is the dollar value of the work-in-process? b) If the work-in-process could be reduced to 6 weeks and the annual cost of carrying inventory was 20% of the WIP inventory value, what would be the annual savings? 2. Amalgamated Fenderdenter's sales are $12 million. The company spends $3.7 million for purchase of direct materials and $3.4 million for direct labor; overhead is $3.5 million and profit is $1.4 million. Direct labor and direct material vary directly with sales, but overhead does not. The company wants to increase its profit by 50%. a) By how much should the firm increase annual sales? b) By how much should the firm decrease material costs? c) By how much should the firm decrease labor cost