목차 1.Case Summary 2.Question 1 3.Question
2
본문 Pepe Jeans
Pepe presented a range of jeans styles that
offered a betterfitthan traditional 5- pocket Wsettern jeans. Agents take
orders fromretailerfor six-month deliver. After Pepe receives an order,
theretailer has only one week in which to cancel.
Current
situation Pepe Jeans’ current situation: Unit Price = £
45, Sale = £ 200M, Cost of sale = 40% =
£80M, Operating Expense = 28% = £56M,
Profit before taxes = 32% = £64M, Future expenses:
Investment in new equipment = £1M, Operation cost
per year = £500,000 Renovation cost = £300,000
Focus
Flexible system would lead to an increase in the
sales of about 10% Current Sales - £200,000,000 10% of
£200,000,000 would be £20,000,000
Question
1 Acting as an outside consultant, what would you recommend that Pepe do?
Given the data in the case, perform a financial analysis to evaluate the
alternatives that you have identified. (Assume that the new inventory could be
valued at six weeks’ worth of the yearly cost of sales. Use a 30 percent
inventory carrying cost rate.) Calulate a payback period for each
alternative.
Decrease of lead would lead to an increase in costs by
30%
Currently the yearly cost of sales is 40% of sales of
£200,000,000 that is £80,000,000(0.4x
£200,000,000)
If the cost goes up by 30% it would mean 30% of
£80,000,000M that is £24,000,000
It return for
this increase in cost the company could make an approximate Increase in
thePBT of£6,400,000 that would still mean (24,000,000 –
6,400,000) = £17,600,000 Additional burden on the
company
The advantage in this alternative is that the company does not
have to make any inital investment but has to incur this additional burden every
year. Since no investment is made, no payback period is
calculated.
본문내용
Case Study : Pepe Jeans
Pepe
Jeans Pepe presented a range of jeans styles that offered a better fit than
traditional 5- pocket Wsettern jeans. Agents take orders from retailer for
six-month deliver. After Pepe receives an order, the retailer has only one week
in which to cancel. Current situation Pepe Jeans’ current situation: Unit
Price =45,Sale =200M,Cost of sale = 40% = 80M,
Operatin |
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