1. If sales are $500,000, direct manufacturing costs are $400,000, and overhead is $50,000, what would the improvement in profit be if direct manufacturing costs were reduced to $300,000? State your answer as a percentage of change. Do not use the % sign, just the value. Round to the nearest integer.
2. Using the information in question 1, how much would sales have to increase to provide the same increase in profits? State as an integer. This is a percentage.
3. A company has average lead time of 7 weeks, annual CoGS of $1 million, and a 50 week year. What is the average value of the WIP? Round to the nearest integer. Do not use a comma anywhere in the answer nor any other sign.
4. Based on the previous question's information, If lead time is reduced to 3 weeks and H is 45%, what is the annual savings? The answer is in dollars.
5. Develop a level production strategy that ends with 10 units of inventory and fill in the table below.
Period 1 2 3 4 5 6
Forecast 32 38 40 42 37 35
Planned Production 38 38 38 38 38 38
Planed Inventory 6
Fill in answer for this question using the Planned inventory value for period 5.
6. Calculate the ATP. There are currently 50 units on hand. What is the ATP for period 6?
1 2 3 4 5 6
Orders 40 30 25 10 15 5
MPS 85 85 85
ATP
7. Complete the following problem. The time fence is at the end of week two. The lot size is 70.
1 2 3 4 5 6
Forecast 25 20 25 20 25 20
Orders 30 22 20 21 18 18
Inventory 52
MPS
ATP
What is the inventory for period 6?
8. Using your work in the previous problem, what is the ATP for period 5?
9. Given the table below, what is the Projected Available Balance for period 5? Show all work in Excel.
Week 1 2 3 4 5
Gross Req. 50 125 100 60 40
Sch. Rec. 200 200
Projected Available
-100
Net Req.
Planned Order Rec.
Planned Order Rel.
10. Given the calculations in the previous question, what is the Projected Available Balance for period 4?