Hau Lee Furniture, Inc., spends 45% of its sales dollars in the supply chain and finds its current profit of 24,000 inadequate. The bank is insisting on an improved profit picture prior to the approval of a loan for some new equipment. Hau would like to improve the profit line to $29,000 so he can obtain the bank's approval for the loan.

	Current Situation
Sales	$80,000
Cost of material	$36,000 (45%)
Production costs	$12,000 (15%)
Fixed cost	$8,000 (10%)
Profit	$24,000 (30%)

a) What percentage improvement is needed in the supply chain strategy for profit to improve to

$29,000? What is the cost of the material with a $29,000 profit?

A decrease in 13.89% in material (supply-chain) costs is required to yield a profit of $29,000, for a new material cost of $31000.

(Enter your response for the percentage decrease to one decimal place and enter your response for the new material cost as a whole number.)

Fill in blanks for B.

b) What percentage improvement is needed in the sales strategy for profit to improve to $29,000? What must sales be for-profit to improve to

$29,000? An increase of ________ in sales is required to yield a profit of $29,000, for a new level of sales of __________

(Enter your response for the percentage increase to one decimal place and enter your response for the new sales as a whole number.)