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Gianni & Sons buys Tshirts in bulk, applies its own trendsetting silkscreen designs, and then sells the Tshirts to a number of retailers. Gianni wants
Gianni & Sons buys Tshirts in bulk, applies its own trendsetting silkscreen designs, and then sells the Tshirts to a number of retailers. Gianni wants to be known for its trendsetting designs, and it wants every teenager to be seen in a distinctive Gianni T-shirt. Gianni presents the following data for its rst two years of operations, 2016 and 2017. 0 (Click the icon to view the data.) Read the muirements. Requirement 1. Calculate the amount and cost of unused administrative capacity at the beginning of 2017, based on the actual number of customers Gianni served in 2017. First select the formula, then enter the appropriate amounts to calculate cost of unused administrative capacity at the beginning of 2017. Amount of unused capacity x Administrative cost per customer = Cost of unused capacity V ' 1 .000 x 375 $ 375,000 Requirement 2. Suppose Gianni can only add or reduce administrative capacity in increments of 250 customers. What is the maximum amount of costs that Gianni can save in 2017 by downsizing administrative capacity? Begin by selecting the formula, then enter the appropriate amounts to calculate the maximum cost the company can save. |:| x :l = Maximum costs saved by downsizing More info 1. Number of T-shirts purchased Number of T-shirts discarded Number of T-shirts sold (row 1 - row 2) Average selling price Average cost per T-shirt Administrative capacity (number of customers) Administrative costs PT~'.'E":P'9'!'J Administrative cost per customer (row 7 -:- row 6) $ $ 2016 215,000 15,000 200,000 30.00 $ 15.00 $ 4,500 1,633,500 $ 363 $ 2017 245,000 20,000 225,000 31 .00 13.00 4,250 1 ,593,750 375 Administrative costs depend on the number of customers Gianni has created capacity to support, not on the actual number of customers served. Gianni had 3,600 customers in 2016 and 3,500 customers in 2017. Requirements 1. Calculate the amount and cost of unused administrative capacity at the beginning of 2017, based on the actual number of customers Gianni served in 2017. 2. Suppose Gianni can only add or reduce administrative capacity in increments of 250 customers. What is the maximum amount of costs that Gianni can save in 2017 by downsizing administrative capacity? 3. What factors, other than cost, should Gianni consider before it downsizes administrative capacity
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