Big 10 Sweater Case Study
Inventory Management at Big10Sweaters.com case study
1.UnitUnitSalesSale PriceCostRevenueCostMargin
Ohio2,300$12073.88$276,000$169,924$106,076
Michigan1,468$12073.88$176,160$108,456$67,704
Purdue890$12073.88$106,800$65,753$41,047 eBay
342$5060.88$17,100$20,821($3,721)
Totals5,000$576,060$364,954$211,106 Overhead:$120,000 Net Profit:$91,106
After paying 25% to the venture capital firm, $22,776.50, the net profit before taxes
would be $68,329.50. Then after paying taxes of $34,164.75 they would be left with
$34,165 of an increase in cash.
2.Aggregate demand forecasting is used by the company because the business is
centered around the custom printing of the ... Show more content on Helpwriting.net
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Based on the forecast data Ohio State gets 33.78% or 2,627 units, Michigan get
23.87% or 1,856 units, Purdue get 13.51% or 1,051 units, Michigan State gets
21.85% or 1,699 units, and Indiana gets 6.98% or 543 units.
If we base this on the individual forecasts we would order the following:
Ohio State = NORMSINV(.809123,2500,300) = 2,762
Michigan = NORMSINV(.809123,1767,252) = 1,987
Purdue = NORMSINV(.809123,1000,100) = 1,087
Michigan State = NORMSINV(.809123,1617,126) = 1,727
Indiana = NORMSINV(.809123,517,76) = 583
Total order size would be 8,146. There is a difference of 8,146 7,767 = 379 sweaters.
4.UnitUnitSalesSale PriceCostRevenueCostMargin
Ohio2,500$12073.88$300,000$184,700$115,300
Michigan1,767$12073.88$212,040$130,546$81,494
Purdue1000$12073.88$120,000$73,880$46,120
Michigan State1617$12073.88$194,040$119,464$74,576
Indiana517$12073.88$62,040$38,196$23,844 eBay
366$5060.88$18,300$22,282($3,982)
Totals7,767$906,420$569,068$337,352 Overhead: $161,000 Net Profit: $176,352
If the same principles are applied in regards to venture capital and taxes we see that
the venture capital people would get $44,088 leaving $132,264 before taxes. Taxes
would come to $66,132 leaving an increase in cash of $66,132.
5.At current the company only advertises in programs distributed at