Hau Lee$$ Furniture, Inc., spends $55\%$ of its sales dollars in the supply chain and finds its current profit of $$$

$35,000$ inadequate. The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment. Hau would like to improve the profit line to $$$ $40,000$ so he can obtain the$$ bank's approval for the loan.

Current Situation

Sales

$$$

$140,000$

Cost of material

$$$

$77,000($

$55\%)$

Production costs

$$$

$21,000($

$15\%)$

Fixed cost

$$$

$7,000($

$5\%)$

Profit

$$$

$35,000($

$25\%)$

Part $2$

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

$40,000?$ What is the cost of material with a $$$$40,000$profit$?$

A decrease of enter your response here $\%$ in material$($supply$-$chain$)$ costs is required to yield a profit of $$$

$40,000,$ for a new material cost of