The managers of Whitcomb Foods decide they will hire a management accountant to help them analyze the decision to expand their product line. They solicit bids from various accountants in the city and receive three proposals. In describing their qualifications for the job, the three state the following: Accountant A: “I have recently advised the symphony on how to raise money and therefore I know the local area well.” Accountant B: “I have advised several small firms on expansion plans.” Accountant C: “I have advised Patrician Juices [Whitcomb’s main competitor] and can share its experiences and insights with you.” All of the proposals have the same price. Questions: 1. As the accounting manager of Whitcomb Foods, prepare a memo recommending which accountant you would prefer to retain. Be sure to include your reasons. 2. Which, if any, of the accountants making a proposal are violating the IMA’s code of ethics? What is (are) the violation(s)?

The managers of Whitcomb Foods decide they will hire a management accountant to help them analyze the decision to expand their product line. They solicit bids from various accountants in the city and receive three proposals. In describing their qualifications for the job, the three state the following: Accountant A: “I have recently advised the symphony on how to raise money and therefore I know the local area well.” Accountant B: “I have advised several small firms on expansion plans.” Accountant C: “I have advised Patrician Juices [Whitcomb’s main competitor] and can share its experiences and insights with you.” All of the proposals have the same price. Questions: 1. As the accounting manager of Whitcomb Foods, prepare a memo recommending which accountant you would prefer to retain. Be sure to include your reasons. 2. Which, if any, of the accountants making a proposal are violating the IMA’s code of ethics? What is (are) the violation(s)?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section11.4: Marketing Models

Problem 30P: Seas Beginning sells clothing by mail order. An important question is when to strike a customer from...

See similar textbooks

Similar questions

Seas Beginning sells clothing by mail order. An important question is when to strike a customer from the companys mailing list. At present, the company strikes a customer from its mailing list if a customer fails to order from six consecutive catalogs. The company wants to know whether striking a customer from its list after a customer fails to order from four consecutive catalogs results in a higher profit per customer. The following data are available: If a customer placed an order the last time she received a catalog, then there is a 20% chance she will order from the next catalog. If a customer last placed an order one catalog ago, there is a 16% chance she will order from the next catalog she receives. If a customer last placed an order two catalogs ago, there is a 12% chance she will order from the next catalog she receives. If a customer last placed an order three catalogs ago, there is an 8% chance she will order from the next catalog she receives. If a customer last placed an order four catalogs ago, there is a 4% chance she will order from the next catalog she receives. If a customer last placed an order five catalogs ago, there is a 2% chance she will order from the next catalog she receives. It costs 2 to send a catalog, and the average profit per order is 30. Assume a customer has just placed an order. To maximize expected profit per customer, would Seas Beginning make more money canceling such a customer after six nonorders or four nonorders?
It costs a pharmaceutical company 75,000 to produce a 1000-pound batch of a drug. The average yield from a batch is unknown but the best case is 90% yield (that is, 900 pounds of good drug will be produced), the most likely case is 85% yield, and the worst case is 70% yield. The annual demand for the drug is unknown, with the best case being 20,000 pounds, the most likely case 17,500 pounds, and the worst case 10,000 pounds. The drug sells for 125 per pound and leftover amounts of the drug can be sold for 30 per pound. To maximize annual expected profit, how many batches of the drug should the company produce? You can assume that it will produce the batches only once, before demand for the drug is known.
I need a detailed explanation and assistance to solve this proble: A client asks his stockbroker to invest $100,000 for maximum annual income, subject to the three conditions: Spread the investment over no more than three different stocks. Put no more than 40 percent of the money into any one stock Put a minimum of $10,000 into an oil stock. The broker has identified three stocks for investment. Their estimated annual returns per share and price per share are shown in the following table: Stock Price per Share Estimate Annual Return per Share Oil $120 $11 Auto $52 $4 Pharmaceutical $18 $2 The client wishes to use LP to determine the optimal number of shares to buy for each stock, so as to maximize the total estimated return. a) Write down the decision variables. b) Write down the optimization statement for the objective function. c) Write down the constraints.
A firm that plans to expand its product line must decide whether to build a small or a large facilityto produce the new products. If it builds a small facility and demand is low, the net present valueafter deducting for building costs will be $400,000. If demand is high, the firm can either maintainthe small facility or expand it. Expansion would have a net present value of $450,000, and maintaining the small facility would have a net present value of $50,000.If a large facility is built and demand is high, the estimated net present value is $800,000. If demandturns out to be low, the net present value will be – $10,000.The probability that demand will be high is estimated to be .60, and the probability of low demandis estimated to be .40.a. Analyze using a tree diagram.
A firm that plans to expand its product line must decide whether to build a small or a large facilityto produce the new products. If it builds a small facility and demand is low, the net present valueafter deducting for building costs will be $400,000. If demand is high, the firm can either maintainthe small facility or expand it. Expansion would have a net present value of $450,000, and maintaining the small facility would have a net present value of $50,000.If a large facility is built and demand is high, the estimated net present value is $800,000. If demandturns out to be low, the net present value will be – $10,000.The probability that demand will be high is estimated to be .60, and the probability of low demandis estimated to be .40. 1- Compute the EVPI 2- Determine the range over which each alternative would be best in terms of the value of P ( low demand )
A food company is considering three different salad dressings to introduce nationally, Dressing A, B, and C. They also have the option to not introduce any dressing this year. The profits from dressings A, B, and C are $1,144,712, $1,515,938, and $2,525,542 respectively if the national market is favorable. However, if the national market is unfavorable, the losses are $555,615, $758,875, and $912,435 respectively. Historical data shows a probability of 0.568 for a favorable national market. The company can test the market for salad dressings in selected geographic areas before introducing them nationally. The cost of the test market is $53,331. In the past, the probability of a negative test market was 0.354. Given a positive test market, a favorable national market was actually observed with a probability of 0.745. Given a negative test market, a favorable national market was actually observed with a probability of 0.304. Determine if the company should test the market before…
During the year, Brownout Company experienced the following power outages:Number of Power Outages Per Month Number of Months 0 3 1 2 2 4 3 3 12Each power outage results in out of pocket costs of P400. For P500 per month, the company can lease an auxiliary generator to provide power during outages. If the company leases an auxiliarygenerator next year, the estimated savings (or…
Given the following data on inputs and outputs at a work center, determine the cumulative deviation and the backlog for each time period. The beginning backlog is 7. (Negative amounts should be indicated by a minus sign.) Input Period 1 2 3 4 5 6 Planned 200 200 180 190 190 200 Actual 210 200 179 195 193 194 Output Period 1 2 3 4 5 6 Planned 200 200 180 190 190 200 Actual 205 194 177 195 193 200 1 2 3 4 5 6 Input Cumulative Deviation Output Cumulative Deviation Backlog 7
A battery manufacturing plant has been ordered to cease discharging acidic waste liquids containing mercury into the city sewer system. As a result, the firm must now adjust the pH and remove the mercury from its waste liquids. Quotations from three firms are included in the following table of costs. Bidder Installed Cost Annual Operating Cost Annual Income from Mercury Recovery Salvage Value Foxhill $ 70,000 $5000 $6500 $10,000 Instrument Quicksilver 50,000 5000 2500 0 Almaden 90,000 5000 7800 10,000 If the installation will last 15 years and money is worth 12%, which equipment should be purchased?
Perdaris Enterprises had an expenditure rate of E′(x) = e0.1x dollars per day and an income rate of I′(x) = 98.8 - e0.1x dollars per day on a particular job, where x was the number of days from the start of the job. The company’s profit on that job will equal total income less total expenditures. Profit will be maximized if the job ends at the optimum time, which is the point where the two curves meet. Find the following.(a) The optimum number of days for the job to last(b) The total income for the optimum number of days(c) The total expenditures for the optimum number of days(d) The maximum profit for the job
McGwire Aerospace expects to have net cash flow of $12 million. The company forecasts that its operating costs excluding depreciation and amortization will equal 75 percent of the company’s sales. Depreciation and amortization expenses are expected to be $5 million and the company has no interest expense. All of McGwire’s sales will be collected in cash, costs other than depreciation and amortization will be paid in cash during the year, and the company’s tax rate is 40 percent. What is the company’s expected sales?
West Company’s contribution format income statement for March 2020 is givenbelow:Sales (15,000 units X $30 per unit) $450,000Variable expenses 315,000Contribution margin 135,000Fixed expenses 90,000Net operating income $ 45,000The industry in which West Company operates is quite sensitive to regularmovements in the economy. Thus, profits vary considerably from year to yearaccording to general economic conditions. The company has a large amount ofunused capacity and is studying ways of improving profits.Required:The company CEO has asked you as a Senior Manager to evaluate the belowsituations with recommendations:1- New equipment has come onto the market that would allow WestCompany to automate a portion of its operations. Variable expenseswould be reduced by $9 per unit. However, fixed expenses wouldincrease to a total of $225,000 each month. How Net Income wouldappear if the new equipment were purchased. As a Senior Manager,what factor/s would be paramount in your mind deciding…