1) Purchasing Financials
If your firm has Revenues of $50,000,000 and profits of $5,000,000, what is the
purchasing multiplier? If purchasing costs are $30,000,000, what is the Profit
Leverage Effect associated with a $1,500,000 reduction in purchasing co
Practice Question 1:
A bakery sells lemon cookies and attempts to determine the number of lemon cookies to bake
each day. Production costs amount to $2 per cookie and each cookie sells for $4. Any cookies
not sold at the end of the day are sold for $1 to
Optimal Order Quantity = = +
Practice Question 1:
p = optimal in-stock probability =P(XQ*) =
CU
CO + CU
Cu = $4-$2 = $2
Co = $2 -$1 =$1
p = 2 / (2+1) = .6667
Convert p to k using standard normal table, p = .6667 => k = ~.45 (I would
accept anything betwe
PURCHASING AND INBOUND LOGISTICS
BMGT 472: Section 0101
Spring 2015
Instructor:
Isaac Elking
3346 Van Munching Hall
Phone: 301-405-5637
Email: [email protected]
Class Time: VMH1202
M/W 9:30-10:45 AM
Office Hours:
M/W 10:45-11:45 AM
COURSE MATERIALS
Simulation activities:
purchasing raw materials
scheduling production
selection of warehouse type
determination of warehouse size
selection of transportation mode
allocation of product
selection of promotions and advertisements
collection of market resear
Return-on-Assets Effect Worksheet
1) What is the purchasing multiplier?
a. 1/.05 = 20
b. Therefore, the sales-increase equivalency of a 10% reduction in purchased materials cost
would be?
i. $285,000 * 20 = $5,700,000
1. Would need to increase sales by $5
MRP
Level 0
J750 Mixer
Lead Time = 0
Week
Gross Requirements
On-hand Inventory
Scheduled Receipts
Net Requirements
Planned Order Releases
Level 1
Power Unit
1 per J750
Lead time =2
Gross Requirements
On-hand Inventory
Scheduled Receipts
Net Requirements
P
University of Maryland College Park
Page 1 of 3
Initials _ Date _
Project Title
Pricing Game
Purpose of the Study
This research is being conducted by Stephanie Eckerd at the University of
Maryland, College Park. We are inviting you to participate in this