Suzy's Temporary Employee (STE) business, located in a big city, can do an online criminal backgroundcheck in-house for $1.95 per search with a fixed cost of $23,000. A third-party online security firm offeredto do a similar security search for $9.00 per person with an annual service contract with STE. If STE'sforecast is 2,900 searches next year, should STE continue to do the search in-house or accept the third-party offer? Use the Excel template Break-Even to determine the best decision. Round your answer for thebreakeven quantity to the nearest whole number and round your answer for the amount of saving/loss tothe nearest dollar.Breakeven quantity:Since the demand forecast of 2,900 searches is -Select-than the breakeven quantity, STE-Select- ✓outsource the work. STE -Select- $by outsourcing.searches

Break even quantity is calculate by fixed cost divide by Variable cost. Variable cost = Sales price…

Answered: Suzy's Temporary Employee (STE)…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 30P

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Scenario 4 Sharon Gillespie, a new buyer at Visionex, Inc., was reviewing quotations for a tooling contract submitted by four suppliers. She was evaluating the quotes based on price, target quality levels, and delivery lead time promises. As she was working, her manager, Dave Cox, entered her office. He asked how everything was progressing and if she needed any help. She mentioned she was reviewing quotations from suppliers for a tooling contract. Dave asked who the interested suppliers were and if she had made a decision. Sharon indicated that one supplier, Apex, appeared to fit exactly the requirements Visionex had specified in the proposal. Dave told her to keep up the good work. Later that day Dave again visited Sharons office. He stated that he had done some research on the suppliers and felt that another supplier, Micron, appeared to have the best track record with Visionex. He pointed out that Sharons first choice was a new supplier to Visionex and there was some risk involved with that choice. Dave indicated that it would please him greatly if she selected Micron for the contract. The next day Sharon was having lunch with another buyer, Mark Smith. She mentioned the conversation with Dave and said she honestly felt that Apex was the best choice. When Mark asked Sharon who Dave preferred, she answered, Micron. At that point Mark rolled his eyes and shook his head. Sharon asked what the body language was all about. Mark replied, Look, I know youre new but you should know this. I heard last week that Daves brother-in-law is a new part owner of Micron. I was wondering how soon it would be before he started steering business to that company. He is not the straightest character. Sharon was shocked. After a few moments, she announced that her original choice was still the best selection. At that point Mark reminded Sharon that she was replacing a terminated buyer who did not go along with one of Daves previous preferred suppliers. Ethical decisions that affect a buyers ethical perspective usually involve the organizational environment, cultural environment, personal environment, and industry environment. Analyze this scenario using these four variables.
Scenario 4 Sharon Gillespie, a new buyer at Visionex, Inc., was reviewing quotations for a tooling contract submitted by four suppliers. She was evaluating the quotes based on price, target quality levels, and delivery lead time promises. As she was working, her manager, Dave Cox, entered her office. He asked how everything was progressing and if she needed any help. She mentioned she was reviewing quotations from suppliers for a tooling contract. Dave asked who the interested suppliers were and if she had made a decision. Sharon indicated that one supplier, Apex, appeared to fit exactly the requirements Visionex had specified in the proposal. Dave told her to keep up the good work. Later that day Dave again visited Sharons office. He stated that he had done some research on the suppliers and felt that another supplier, Micron, appeared to have the best track record with Visionex. He pointed out that Sharons first choice was a new supplier to Visionex and there was some risk involved with that choice. Dave indicated that it would please him greatly if she selected Micron for the contract. The next day Sharon was having lunch with another buyer, Mark Smith. She mentioned the conversation with Dave and said she honestly felt that Apex was the best choice. When Mark asked Sharon who Dave preferred, she answered, Micron. At that point Mark rolled his eyes and shook his head. Sharon asked what the body language was all about. Mark replied, Look, I know youre new but you should know this. I heard last week that Daves brother-in-law is a new part owner of Micron. I was wondering how soon it would be before he started steering business to that company. He is not the straightest character. Sharon was shocked. After a few moments, she announced that her original choice was still the best selection. At that point Mark reminded Sharon that she was replacing a terminated buyer who did not go along with one of Daves previous preferred suppliers. What should Sharon do in this situation?
Scenario 4 Sharon Gillespie, a new buyer at Visionex, Inc., was reviewing quotations for a tooling contract submitted by four suppliers. She was evaluating the quotes based on price, target quality levels, and delivery lead time promises. As she was working, her manager, Dave Cox, entered her office. He asked how everything was progressing and if she needed any help. She mentioned she was reviewing quotations from suppliers for a tooling contract. Dave asked who the interested suppliers were and if she had made a decision. Sharon indicated that one supplier, Apex, appeared to fit exactly the requirements Visionex had specified in the proposal. Dave told her to keep up the good work. Later that day Dave again visited Sharons office. He stated that he had done some research on the suppliers and felt that another supplier, Micron, appeared to have the best track record with Visionex. He pointed out that Sharons first choice was a new supplier to Visionex and there was some risk involved with that choice. Dave indicated that it would please him greatly if she selected Micron for the contract. The next day Sharon was having lunch with another buyer, Mark Smith. She mentioned the conversation with Dave and said she honestly felt that Apex was the best choice. When Mark asked Sharon who Dave preferred, she answered, Micron. At that point Mark rolled his eyes and shook his head. Sharon asked what the body language was all about. Mark replied, Look, I know youre new but you should know this. I heard last week that Daves brother-in-law is a new part owner of Micron. I was wondering how soon it would be before he started steering business to that company. He is not the straightest character. Sharon was shocked. After a few moments, she announced that her original choice was still the best selection. At that point Mark reminded Sharon that she was replacing a terminated buyer who did not go along with one of Daves previous preferred suppliers. What does the Institute of Supply Management code of ethics say about financial conflicts of interest?
Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?
Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?
per board and fixed costs of $300,000. Determine: The number of skateboards required to sell to breakeven. The profit if they have been selling about 8,000 pr year. a) Now, they are considering undertaking an advertising program with GBC Promotions that would cost $150,000 (additional fixed cost) and increasing the price by $160 to $400. Find the number of skateboards required to sell at $400 and make the same amount of profit as in part “b”. b) What is the % sales decline that can occur in c, to make the same profit as before
Deborah provides the following list for her CPA who is preparing her gift tax return. Which of the following will be included as a taxable gift? Payment to her grandmother of $20,000 to help her with her medical bills. Payment to Doctor’s Hospital for $35,000 to cover the medical bills of a friend. Payment to Northshore Medical School for $17,000 to cover her nephew’s tuition. $6,000 to her son to help cover his college expenses. Carole made the following transfers this year: She gave her friend, Paul, $23,000 to pay his tuition for law school. She made a $14,000 alimony payment of $20,000 to her ex-husband. She paid $20,000 to Diamond Shores Hospital for her friend Jackie’s medical bill. If these are the only gift transactions this year, what is the amount of Carole’s taxable gifts?
An investor has patented a new device, and a bank is willing to lend the money to manufacture the device. Preliminary investigation establishes a suitable planning period of 5 years for the comparison of payoffs from this invention. According to the investor’s analysis, profit of $800,000 can be anticipated over the next 5 years if sales are strong; if sales are average, the investor can expect to make $200,000; and if sales are week, the investor expects to loss $50,000. Nationwide Enterprises, Inc. has offered to purchase the patent rights. Based on royalty arrangement, the inventor estimates that selling the patent rights may well bring a net profit of $400,000 if sales are strong, $70,000 if sales are average and $10,000 if sales are week. On the basis of extensive investigation of past experience with similar devices, the investor assigns the probabilities for strong, average, and week sales to be 0.2, 0.5, and 0.3 respectively. 1. Setup the payoff table for the inventor’s…
To protect themselves, restaurant owners should make their lease contingent on obtaining the necessary? a SBA approval b loans c licenses and permits d partners
De Mar, a plumbing, heating, and air-conditioning companylocated in Fresno, California, has a simple but powerful product strategy: Solve the customer’s problem no matter what, solvethe problem when the customer needs it solved, and make sure thecustomer feels good when you leave . De Mar offers guaranteed,same-day service for customers requiring it. The company provides 24-hour-a-day, 7-day-a-week service at no extra charge forcustomers whose air conditioning dies on a hot summer Sundayor whose toilet overflows at 2:30 A.M. As assistant service coordinator Janie Walter puts it: “We will be there to fix your A/C onthe fourth of July, and it’s not a penny extra. When our competitors won’t get out of bed, we’ll be there!”De Mar guarantees the price of a job to the penny before thework begins. Whereas most competitors guarantee their work for30 days, De Mar guarantees all parts and labor for one year. Thecompany assesses no travel charge because “it’s not fair to chargecustomers for…
Mr. Appoh has operated a satisfactory account with your branch for a period of 6 years. He is a 40-year old mechanical engineer who runs a professional office engaged in considering and contacting work for the TDC, Tema, as well as for the private sector. Today Mr. Appoh calls to discuss with you his housing mortgage loan matter under your bank's mortgage loan scheme for private house ownership. For the discussion, he had produced a contractor’s estimate of the cost of a private house he plans to build. The cost of the house was estimated at GHȼ30million. He says he has been allocated a plot of land at Tema and he has been given all the necessary documents. He is applying for a mortgage loan of GHȼ20million repayable within a period of 10 years. He has in his house ownership savings account a total of GHȼ16million, more than the minimum savings required of beneficiaries under the scheme. You are prepared to help him. Your bank takes a legal mortgage of the property concerned. Required:…
Joel Deaine, CEO of Deaine Enterprises Incorporated (DEI), is considering a special offer to manufacture a new line of women’s clothing for a large department store chain. DEI has specialized in designer women’s clothing sold in small, upscale retail clothing stores throughout the country. To protect the very elite brand image, DEI has not sold clothing to large department stores. The current offer, however, might be too good to turn down. The department store is willing to commit to a large order, which would be very profitable to DEI, and the order would be renewed automatically for two more years, presumably to continue after that point. Required: Explain two of the implementation tools covered in this chapter that Joel can use to implement his strategy.

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