Answer: 29.4 gallons
Explanation:
The Safety Stock that should be held by the company to have a Service Level of 99.0% will be:
= Z × σ × ✓LT
Z = 2.326
σ = Standard deviation = 8
LT = Lead time = 2.50
Safety stock = = Z × σ × ✓LT
= 2.326 × 8 × ✓2.50
= 2.326 × 8 × 1.58
= 29.4 gallons
The safety stock is 29.4 gallons.
Question:
A potato chip manufacturer purchases a potato farm. Which of the following regarding its strategy is true?
A. The manufacturer has effectively used vertical integration to increase its bargaining position and reduce transaction costs.
B. The manufacturer has enhanced utilisation by allowing depreciation and other fixed costs to be spread over a larger unit volume.
C. The manufacturer has sacrificed quality by using a lower-cost input.
D. The manufacturer has efficiently capitalised on the experience and learning-curve effects within the company.
E. The manufacturer has effectively reduced its operating costs by outsourcing its activities.
Answer:
A. the Manufacturer has effectively used vertical integration to increase it's bargaining position and reduce transaction costs.
Explanation:
Vertical integration is a business strategy whereby a business acquires ownership or controls its suppliers, distributors, or retail locations to control its value or supply chain.
It may also be said that vertical integration has to do with the purchase of a part of all of the production or sales process that was previously outsourced, to have it done in-house.
An example of companies who have done this are:
1. Apple
2. Netflix
3. Comcast (Which acquired NBC)
Businesses can integrate by
- purchasing their suppliers to reduce the costs of manufacturing or
- controlling the distribution process that is, owning and controlling the warehousing and delivery of their products etc.
Answer:
To create human capital in a company, it is mainly necessary to capture it (recruit and select it) and retain it (make it stay in the organization).
Explanation:
First, to be able to recruit competitively, the organization has to work its corporate brand.
Secondly, there must be efficient and current recruitment processes. Recruitment is the process of attracting talent to the selection processes.
Once the worker is incorporated into the company, strategies must be used to improve talent retention and team performance.
Answer:
False
Explanation:
The after cost of debt is always lower than the before tax cost of debt. For example, a company borrows $1,000,000 and pays 7% interest per year. This results in $70,000 in interest expense before taxes = $1,000,000 x 7% = $70,000.
The after tax cost of the debt = $1,000,000 x 7% x (1 - tax rate) = $1,000,000 x 7% x (1 - 21%) = $1,000,000 x 7% x 0.79 = $55,300
Answer:
B
Explanation:
A currency appreciates when its value increases.
For example if $1 was exchanged for 50 pesos. After appreciation of the pesos, $1 would buy $25 pesos.
So more $2 would be needed to buy 50 peso after the appreciation when before the appreciation $1 was buying 50 pesos.
As a result Mexican goods would become more expensive to US consumers and the revenue earned by Mexican producers would increase
