net revenue

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MGSC 303 EXAM 1 SUM 2013
1. ABC Co. had a Net Revenue of $75,000, Cost of Sales $60,000.
It had Inventory Investment of $12000 and Total Assets of $150,000.
Find:
a) Percentage of assets committed to inventory:

b) Inventory turnover:
c) Weeks of Inventory:
2. ABC Co. while reviewing its performance found the following:
		Current Year	Last year
Cost of goods sold		$800,000	$750,000
Inventory investment		$80,000	$78,000
a) Find weeks of supply for current and last year.
b) Find inventory turnover for current and last year.
c) Comment on performance this year compared to last year.
3. ABC Company is considering 3 foreign locations for outsourcing its call center.
The following table gives weights for criteria used, score assigned for each criterion.
The score range from 0 to 10, where 10 indicates excellence and zero very poor.

Criterion	Weight	Country X	Country Y	Country Z
Flexibility	0.1	8	6	9
Trustworthy	0.3	9	5	7
Price	0.4	9	8	8
Delivery	0.2	4	7	5
a) Computed weighted score for each criterion and total weighted score for each country.

b) Which country should be selected? Explain.
4. ABC company wants to determine whether a component should be manufactured
in-house or outsourced. The following table gives related data.
In-house: Annual Fixed Cost, FIN = $80000
	Variable cost/unit, VIN = $10
Out Source:
Annual Fixed Cost, FOU = $120,000
	Variable cost/unit, VOU = $5
Find: a) Break Even Annual Demand
b) If annual demand is 10,000 units which option would you recomment? Explain.

	At this demand level the total cost will be the same for both alternatives.
	If actual forecasted demand is greater than 5000 units, then outsourcing
	is cheaper. If the demand is less than 5000 units, it is cheaper to make
	in-house.
	For a given demand, you can also use the total cost to compare the
	alternatives.
	Total Cost = Annual Fixed cost + (Variable cost/unit) Demand.