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Hau Lee Furniture, Inc., spends 50% of its sales dollars in the supply chain and finds its current profit of $20,000 inadequate. The bank is
Hau Lee Furniture, Inc., spends 50% of its sales dollars in the supply chain and finds its current profit of $20,000 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 $25,000 so he can obtain the bank's approval for the loan. Current Situation Sales Cost of material $80,000 $40,000 (50%) $12.000 (15%) $8,000 (10%) $20,000 (25%) Production costs Fixed cost Profit a) What percentage improvement is needed in the supply chain strategy for profit to improve to $25,000? What is the cost of material with a $25,000 profit? % in material (supply-chain) costs is required to yield a profit of $25,000, for a new material cost of $(Enter your response for the A decrease of percentage decrease to one decimal place and enter your response for the new material cost as a whole number.)
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