1. A firm seeks to minimize its inventory cost. They use 2520 of these items each year. The items cost $200 and has a inventory carrying cost of 5 percent. it cost them $79.37 to place an order for more of this item. Assume there are 360 days in one year. It normally takes seven days to receives an order after it is placed. Determine how much they should order each time they place an order so they can minimzie their total inventory cost of this item.
2. When should they reorder more of this item to be sure they do not run out of it?
3. An agribusiness firm is trying assess its chances for success in a new market. Market research has estimated they will sell $18million of the product when the price is $300 per pallet. The average variable cost is $225 per pallet. The plant needed to service this market will require an investment of $3 million.
4. Using the information given above, determine the minimum annual dollars sales needed to make a 5 percent profit in this market.
5. Using ths information given above, determine the proper mark-up percentage for this product.
6. using the original situation information, determine the minimal increase in dollar sales needed to breakeven on an advertising program for this product that requires a $500000 outlay?
7. If the firm choose make the product a loss leader (sell at zero profit-breakeven) and sold the number of units estimated by the marketing department, what price should they charge?
8. Explain the role that organizing plays in the successful operation of an agribusiness. Give an example that proves your point?