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At the BlueFin Bank corporate headquarters, management was discussing the potential of outsourcing the processing of credit card transactions to DataEase, an international provider of
At the BlueFin Bank corporate headquarters, management was discussing the potential of outsourcing the processing of credit card transactions to DataEase, an international provider of banking operational services. Processing of the transactions at BlueFin has been a costly element of the annual profit and loss statement and the continual investment in equipment to keep up to date has been draining capital reserves. Based upon initial study and negotiations, DataEase will charge $0.02 more per transaction than BlueFin's cost per transaction, and DataEase will want $13 million per year to cover equipment and overhead costs associated with the contract. BlueFin has yet to develop an estimate for the annual overhead and fixed costs associated with processing the transactions. These costs include supervision, administrative support, maintenance, equipment depreciation, and overhead. If BlueFin must process 21 million transactions per year, how high must those fixed costs be before it would pay to use DataEase? The fixed costs must be higher than 9 (Enter your response as an integer.) Cyberphone, a manufacturer of cell phone accessories, ended the current year with annual sales (at cost) of $42 million. During the year, the inventory of accessories turned over six times. For the next year, Cyberphone plans to increase annual sales (at cost) by 21 percent. a. What is the increase in the average aggregate inventory value required if Cyberphone maintains the same inventory turnover during the next year? \$ (Enter your response as an integer.) b. What change in inventory turns must Cyberphone achieve if, through better supply chain management, it wants to support next year's sales with no increase in the average aggregate inventory value? turns. (Enter your response rounded to one decimal place.)
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