A company has sales of $150 million, cost of goods sold of $100 million, and a before-tax profit of 8%. Ifpurchasing was able to reduce the cost of goods sold by $5 million, how much additional sales would berequired to achieve the same impact on profit?
A U.S. hospital system is considering outsourcing a portion of its diagnostic workload to a medicalconsulting firm based in India. In the United States these diagnostic services, done internally by thehospital system, cost $700,000 per year. The consulting firm would charge $400,000 per year for the sameworkload. In addition, the hospital system expects to spend $50,000 per year in managerial oversight,$8,000 per year administering the contract, and $125,000 to initially train the consulting firm’s staff(amortized over five years). What is the total annual outsourcing cost during the first five years?
* purchasing executive concerned about a perceived lack of control over purchasing activities shouldA. determine the profit leverage level.B. create a supplier scorecard.C. conduct a spend analysis.D. conduct a preferred supplier analysis.
The three tactics companies have been using to reduce the number of suppliers areA. consolidating similar suppliers, purchasing families of parts, modular production.B. modular production, purchasing families of parts, reshoring.C. modular production, lean production, reshoring.D. consolidating similar suppliers, modular production, lean production.
