AGGREGATE
PLANNING
1
Aggregate Planning
Aggregate planning is an operational activity
which does an aggregate plan for
the productions process, in advance of 2 to 18
months, to give an idea to management as to what
quantity of materials and other resource
Chapter 2  Mathematics of Merchandising
2
Summary of Notation and Formulas
notation
L = List Price
C = Cost
MD =
Markdown
d = Single Discount Rate
OE = Operating Expenses
BE = Breakeven price
d#L = Amount of Trade Discount
PFT = Net Profit
de =
Chapter 2  Mathematics of Merchandising
2.1 
37
Introduction
Merchandising
Merchandising is a process that involves the buying and selling of goods (merchandise) from
the manufacturer, to the final sale of those goods to the consumers. The process can i
112
Chapter 3  BreakEven and CostVolumeProfit Analysis

3
SelfTest Exercises
Answers to all problems are available online
For the following problems, express the answers rounded to two decimal places, wherever applicable.
1. Audrey Manufacturi
Laws 150
Business Law
Instructor: Barbro E. StalbeckerPountney
REQUIRED TEXT: Canadian Business Law 2nd Edition.
Emond Montgomery Publications
1
What Is Law?
Body of norms, or rules, by which society chooses to govern
itself.
a reflection of a society's
Chapter 3  BreakEven and CostVolumeProfit Analysis
3.4 
Contribution Margin (CM) Approach to
CVP Analysis
As defined earlier in Formula 3.1(f), the unit contribution margin (CM) is the amount
remaining from the sales per unit after deducting the vari
70
Chapter 2  Mathematics of Merchandising
25. Shirts were purchased for $12.50 each and were marked up by $16.75. During Christmas, they were discounted by $5.85
per shirt.
a. What is the rate of markdown?
b. What is the reduced selling price per shi
Chapter 2  Mathematics of Merchandising

2
SelfTest Exercises
Answers to all problems are available online
For the following problems, express the answers rounded to two decimal places, wherever applicable.
1. The net price of an item after trad
Chapter 3  BreakEven and CostVolumeProfit Analysis
3.2 
17.
Graphical
Approach for CVP Analysis
(BreakEven Chart)
A breakeven chart is a graphical representation of the following on the same axes:
1. Fixed costs
2. Total costs at various levels
10
Chapter 1  Ratios, Proportions, Percents, and Applications
1.2 
Proportions
When two sets of ratios are equal, we say that they are proportionate to each other. In the proportion
equation the ratios on the left side of the equation are equal to the r
212
Chapter 6  Annuities
19. Ruba saved $1200 of her salary at the beginning of every month in an RRSP earning 3.5% compounded monthly
for 30 years. How much more would she have saved if she had put this amount in an RRSP that was earning an
interest ra
Chapter 4  Simple Interest and Applications
CASE 4b
Investing in Bank of Canada Treasury Bills
Hameed learned that investing his money in Tbills would yield returns that are usually higher than that of a typical savings
account but lower than those of o
Chapter 4  Simple Interest and Applications
4.1 
115
Introduction
Interest is a fee paid by borrowers to lenders for using money temporarily. Interest is an expense
when we borrow money and an income when we invest money.
For example, when we invest mon
Chapter 9  Compound Interest
12. An investment of $5000 in a TFSA (Tax Free Savings Account) accumulated to $5280 at the end of one year at a
monthly compounding interest rate. However, the monthly compounding interest rate for the second year changed
a
160
Chapter 5  Compound Interest
21. Brenda borrowed money to renovate her kitchen. She settled the loan in five years with a single payment of $55,021.80. If
the interest rate charged on the loan was 3.8% compounded semiannually for the first two year
Chapter 3  BreakEven and CostVolumeProfit Analysis
CASE 3
CostVolumeProfit Analysis at a Manufacturing Company
Madison is the newly appointed manager of Spark Communications, a small computer monitor manufacturing company based
out of Halifax, Nova
144
Chapter 4  Simple Interest and Applications
8. Abbey bought a 182day Tbill that has an interest
rate of 4% p.a. and a face value of $25,000.
a. How much did she pay for the Tbill?
b. After 90 days, she sold the Tbill to her
friend when the int
Chapter 5  Compound Interest
5.1 
Introduction
Compound interest
Compound interest is a procedure where interest is calculated periodically (at regular
intervals, known as compounding periods) and reinvested to earn interest at the end of each
compoundi
218
Chapter 6  Annuities
25. Jasmine, an office administrator, was evaluating the following quotation that she received for the purchase of a
printing machine for her company:
Lease Option: Make payments of $750 at the beginning of every month for two y
48
Chapter 2  Mathematics of Merchandising
c.
2.3 
Payment Terms and Cash Discounts
A cash discount is the amount of discount on the net price (invoiced amount) that is offered by a seller
to a buyer to encourage early payment of the invoice. Cash disc
Chapter 3  BreakEven and CostVolumeProfit Analysis
11. Zenith Lighting Inc. makes chandeliers and sells them for $650 each. The costs for administrative salaries, rent,
and utilities are $28,000 per month. The company also recruits a fulltime sales
32
Chapter 1  Ratios, Proportions, Percents, and Applications

1
Review Exercises
Answers to oddnumbered problems are available online
For the following problems, provide your answers rounded to two decimal places, wherever applicable.
1. Christ
166
Chapter 5  Compound Interest
22. Thomas, an architect, is expected to make a first payment of $4000 in one year and a second payment in four
years to a designer. Calculate his second payment if both these payments are economically equivalent to a si
64
Chapter 2  Mathematics of Merchandising
23. Zarita sells clay pots at her pottery studio for $30 each. The overhead expenses are $12 per pot and operating profit
is 30% on selling price.
a. What is her amount of markup per pot?
b. How much does it
172
Chapter 5  Compound Interest
15. A company was charged an interest amount of $18,071.02 on a loan of $100,000 that was compounding monthly
for three years. If the interest rate remains the same, how long will it take for the loan to accumulate an ad
82
Chapter 2  Mathematics of Merchandising
CASE 2
Merchandising Cycle of a Product: Manufacturer to Consumer
Isabelle, a college student, enjoyed this chapter on the mathematics of merchandising and wanted to see for herself
how a product moves through t
22
Chapter 1  Ratios, Proportions, Percents, and Applications
1.4 
Percent Increase and Decrease
c.
Introduction
A few quantities, such as the hourly rate of pay generally increases with time, while quantities such
as the price of an item during a sale
84
Chapter 7  BreakEven and CostVolumeProfit Analysis
3
BREAKEVEN AND
COSTVOLUMEPROFIT ANALYSIS
In any business evaluation, a good understanding of how revenue and
costs change with the quantity produced and sold is important. It is also
necessary t
Chapter 1  Ratios, Proportions, Percents, and Applications
1.5 
Currency Conversions
A very common application of proportions is the conversion of currencies between different countries.
Exchange Rates
Exchange rates:
used to convert
currencies between
Chapter 2  Mathematics of Merchandising
2.4 
Markup
The cost (C) of the product is the amount paid for it after both trade discounts and cash discounts.
The amount of markup (MU), also known as margin or gross profit, is the difference between the
selli