Financial Details Summary (Current -GBP):

Revenue: 32,000,000

PCOGS: 21,000,000 (Cost of goods and services external to the operation/organization)

Other Costs (COGS and Fixed): 6,000,000

Gross Profit: 5,000,000

1. * COST OF GOODS SOLD SENSITIVITY* LOXER-MELTON are concerned about current PCOGS relative to revenues. They feel they are high for the Pharmaceutical sector. Your projected revenues at project breakeven (5 years) are Euros 42 Million with Purchase Costs of Euros 26 Million and profit of Euros 19 Million. Show the Profit Leverage Ratio with a reduction of purchase spend (PCOGS) to 50% of revenue (sector standard) and give one example each of what you might consider to achieve this through Strategic AND Operational purchasing management.