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Case Analysis Pepe Jeans

Satisfactory Essays

Case: PEPE JEANS Questions: 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).Calculate a payback period for each alternative. Option 2 with an ROI of 5 weeks and increased PBT would be the preferred alternative. (ROI financials will not not over) Are there other alternatives that Pepe should consider? I understand the Pepe has a long standing relationship with the agent in Hong Kong. However, I would first look to see what other agents could possibly offer. I know …show more content…

The lead time should be shortened,possibly to as little as six weeks,but costs would increase significantly. Alternative: build a finishing operation in the United

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