Cost Analysis
On our first meeting with our sponsor, we were asked to do a cost analysis to determine what is the lowest price that the company can charge for each style and when would they break even. Since the company had taken reserves on almost all the shoe styles for Dr. Comfort, we had to determine the net inventory after the reserves. To accomplish this task, we created an excel worksheet that lists all the items that have been assigned a percentage of reserves (Please refer to the worksheet in Appendix).
After determining the amount of reserves for each shoe style, we calculated net inventory. We added additional costs such as the average freight for each country and calculated a new cost per style after including all other costs
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Each unit sold after the breakeven quantity would be a profit for the company since all costs would have been covered. To accomplish this task, we used an average cost approach since that is the method used to value Dr. Comfort products.
Interviews
Throughout the course of this project, we met many people who were either directly involved with Dr. Comfort shoes or had years of experience on international markets. Our task was to come up with questions to ask them at each meeting to help us reach our goal.
John Martin, VP of International Markets at DJO Global LLC
The first person we met was John Martin. He is the Vice President of international marketing at DJO. He is not directly involved with any Dr. Comfort products. However, he does have a lot of knowledge about international markets since he is in charge of marketing other medical devices manufactured by DJO in foreign countries. When we met with him, we showed him a list of potential countries that had suitable markets for medical devices based on a list of criteria we developed. He helped us narrow down the list to Australia, Japan, North Korea, Brazil and Russia.
Since we initially considered medical channels in all countries, we asked Mr. Martin which countries he would recommend that we focus on. Mr. Martin‘s knowledge about regulatory restrictions and registration processes helped us exclude China from the list. China has a very long registration process for medical devices that could take up
Breakeven Analysis for Product Tylenol Approach 1 - Same price as Tylenol Approach 2a - Cheaper than Tylenol Approach 2b - Cheaper w/lowered trade cost $ $ $ $ Unit Cost (Variable Cost) 0.60 0.60 0.60 0.60 Trade Cost (Selling Price to Retailers) $ 1.69 $ 1.69 $ 1.05 $ 0.70 Fixed Cost (Advertising) 2,000,000 6,000,000 6,000,000 6,000,000 Break-Even Quantity [Fixed Cost/(Trade Cost-Unit Cost)] 1,834,862 5,504,587 13,333,333 60,000,000 Contribution Margin (Unit) 64% 64% 43% 14%
If a company decides to help differentiate its branded footwear by offering buyers 500 models/styles to choose from, then company managers should evaluate the merits of trying to reduce the $14 million annual costs for production run setup costs associated with producing 500 models/styles at each plant by
1. What is the competitive situation faced by Wilkerson? The critical product in term of market competition is the pumps of Wilkerson Company. The pumps are Wilkersons major product line with a production of about 12,500 units per month. Pumps currently have the lowest gross margin among all products, because competitors had been reducing prices on pumps and Wilkerson adopted its prices in order to remain competitive and to maintain the volume. 2. Given some apparent problems with Wilkersons cost system, should executives abandon overhead assignment to products entirely by adopting a contribution margin approach in which manufacturing overhead is treated as a period expense? Our conclusion is, that they should not adopt a
AE evaluates merchandise inventory at the lower of average cost or market, utilizing retail method. Average cost includes merchandise design and sourcing costs and related expenses. AE records merchandise receipts at the time merchandise is delivered to the foreign shipping port by the manufacturer; at this point the title and risk of loss is transferred to the company.
With revenue from Crocs shoe sales reaching to $680 million in 2007, it is clear that the company has developed a successful strategy. Not all of the success can be contributed to the design of the product. Although their products were in high demand, there are more underlying factors that have paved the way for Crocs to be competitive in the shoe market. Crocs’ supply chain design and use of vertical integration revolutionized speed and quality of order fulfillment.
Manufacturing the Samba Sneakers cost-effectively is very important for the organization. The best option for the organization would be to manufacture the sneaker with the lowest cost for every 1,000 sneaker produced
-Maintained 100% on-hand accountability of 6,668 principal end item held on the MAL and 18 consolidated memorandum receipts valued in excess of $68 million.
1. What is the competitive situation faced by Wilkerson? The critical product in term of market competition is the pumps of Wilkerson Company. The pumps are Wilkersons major product line with a production of about 12,500 units per month. Pumps currently have the lowest gross margin among all products, because competitors had been reducing prices on pumps and Wilkerson adopted its prices in order to remain competitive and to maintain the volume. 2. Given some apparent problems with Wilkersons cost system, should executives abandon overhead assignment to products entirely by adopting a contribution margin approach in which manufacturing overhead is treated as a period expense? Our conclusion is, that they should not adopt
Most leading US medical devices manufacturers sought to introduce new products, secure market share and drive long-term growth to remain competitive. Despite economic jitters in the US, the industry remained healthy and showed little sign of slowing down significantly in 2008. It serves more than 300 million people and should continue to be profitable. As patients continue to make their quality of life an important healthcare priority and are willing to invest in treatments, medical devices manufacturers and providers should experience growth. Medical device companies continued to devote time and money to determine national regulatory requirements, conduct additional overseas clinical trials and equip themselves new medical technologies. The demand for medical devices was driven by growing expenditure on healthcare around the world, including building hospitals and clinics, focusing attention on the health of citizens and adopting better technologies. One of the ongoing issues, however, was the safety and quality of devices originating from overseas, particularly China.
The aim of this report is to recommend whether or not a publicly traded company has been is worth investing in. The company chosen in this case is JPMorgan & Chase which is a large financial institution. This report is going to use a financial rational formed by the analysis of various financial metrics.
The board of directors of the Cortez Beach Yacht Club (CBYC) is developing plans to acquire more equipment for lessons and rentals and to expand club facilities. The board plans to purchase about $50,000 of new equipment each year and wants to begin a fund to purchase a $600,000 piece of property for club expansion.
To satisfy its mission and comply with growing consumer demands, Crocs has built a strategic business concept around maintaining flexibility to offer retailers timely fulfillment while capitalizing on the efficiencies and cost advantages. Consequently Crocs operates a distribution model which is unparalleled in the retail footwear industry. The revolutionary supply chain allowed replenishment system which strengthens its relationships with customers by allowing the company to
Over the course of all three years, SA has been profitable. However, from 2010 to 2011 there was a 6.9% increase in profit. 2011 and 2012 were very similar; there was only a .01% change. Sales were steadily increasing from 2010-2012. Due to the low ticket prices, people are more acceptable to ancillary fees. The cost of goods sold stayed steady over the years, only with a very little difference. On the other hand, SA’s expenses are continuing to go down due to the drop in oil prices, which in turns makes fuel cheaper. The numbers for one-time expenses were relatively low in 2010 and 2011. In 2012 though, there was an $8,450 credit. Due to in steady increase in revenue, the stability of cost of goods sold and expenses, profit is able
This is the project which mainly helps us to know how important the concept of Cost savings is important for each and every department of the company. The steps to be followed in order to make aware of cost savings how it helps both the company and an individual employee. The effects of it in a worthy way depraved way in the view of employee.
Our case study is on the Columbia City Bank. First of all we would like to talk about the general inner workings of a bank. A bank generates a profit from the differential between the level of interest it pays for deposits and other sources of funds, and the level of interest it charges in its lending activities. In recent history, investors have demanded a more stable revenue stream and banks have therefore placed more emphasis on transaction fees, primarily loan fees but also including service charges on an array of deposit activities and ancillary services. Lending activities, however, still provide the bulk of a commercial bank's income. Beside, Banks make money from card products through interest payments and fees