A small warehouse has 100,000 square feet of capacity. The manager at the warehouse is in the process of signing contracts for storage space with customers. The contract has a fee of S3 per square foot based on actual usage (and an up-front monthly fee of $200 per customer, but you can simply ignore this). The maintenance cost per square foot of the warehouse is negligible. The warehouse guarantees the contracted space amount even if it has to arrange for extra space at a price of S6 per square foot. The manager believes that customers are unlikely to use the full contracted amount at all times. Thus, he is thinking of signing contracts with the total space that exceeds the regular capacity of 100,000 square feet. What is the optimal (best) total space size of the contracts he should sign in the following cases: 1. 2. 3. He forecasts that unused space will be normally distributed, with a mean of 20,000 square feet and a standard deviation of 10,000 square feet. He forecasts that unused space will be uniformly distributed from 10,000 to 30,000 square feet: U[10,000; 30,000] The unused space is forecasted to follow the distribution below: Unused space l 10.000 Probability0.1 | 15.000 | 20,000 | 25,000 | 30,000 0.1 35,000 0.2 0.2 0.3
Answers
To determine the optimal total space size of the contracts the manager should sign in each case, we need to consider the cost and probability associated with different levels of unused space.
Case 1: Normally distributed unused space,Mean = 20,000 square feet,Standard Deviation = 10,000 square feet.
To calculate the expected cost, we need to consider the probability of different levels of unused space. In a normal distribution, we can use the cumulative distribution function (CDF) to determine the probability.
Uniformly distributed unused space
Minimum unused space = 10,000 square feet
Maximum unused space = 30,000 square feet
In a uniform distribution, the probability is constant within the range. Therefore, we can calculate the expected cost by finding the average unused space within the range and multiplying it by the cost per square foot:Expected cost = (Average unused space) * (Cost per square foot)
Once we have calculated the expected costs for each case, the manager can choose the optimal total space size of the contracts that minimizes the expected cost.
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Related Questions
Please I need help!!
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Answer:
A
Explanation:
HELP PLEASE, THIS IS TIMED!!!!!!
Answers
Explanation:
I think the answer it's c
Word Bank:
IRS System
Employer
Pay-as-you-go
Government, short
Estimated, offsite
contract labor
quarterly, third
more, two
Social Security
W-4 Form
zero
percentage, lower, net
easier, estimated
gross pay
Federal withholding
W-4
government-based savings
retirement
Medicare, 65
Federal Insurance Contributions Act
21. How you are paid determines how you will pay in to the ______________
_________________.
22. If you are an employee of a company, the company known as your
__________________ must pay in your taxes for you.
23. The federal income tax system is really a _________-_________-_________-
__________ kind of tax system.
24. The ______________ wants to make sure you’re paying as you go so you do
not come up at the end of the year _______________.
25. ________________ taxes are paid by you if you work for someone using your
own equipment and either at your own work area or ______________ from
this person or company’s actual building.
26. You are referred to as _______________ _______________.
27. Most people in this type of situation usually make their payments to the
IRS on a ______________ basis. That is every ___________ month of the year.
28. A self-employed person pays ___________ than another employee in taxes,
because basically, they are paying __________ parts.
29. When you work for someone, the employer is paying half of ______________
______________ taxes on your behalf.
30. When you go to work as an employee for an employer, you will be given a
_________ __________ to complete before you will ever get your first paycheck.
31. You can claim from __________ up to however many dependents you may have.
32. If you claim zero, then the highest _______________, based on your income,
will be withheld from your check. But, as you claim one, two or more, the
amount withheld from your check is _____________, which means your
_____________ pay will be higher.
33. It is ______________ to have your employer take extra money out of your
check and send it to the IRS on your behalf than it is to make
_______________ payments.
34. When the employer calculates your check, the first amount which is
calculated is your __________ __________.
35. _____________ _____________ is the term used for the amount of money
withheld from your paycheck to cover the income tax you owe.
36. The calculation of how much withholding is taken out of your check is
based on the information you provided in your _____________.
37. Social Security is a _____________-______________ ____________ system all
U.S. citizens who work pay into.
38. When you reach _______________ age, you will then receive a monthly check
from Social Security.
39. _______________ is a government-based medical insurance system individuals
can use after they reach the age of ______.
40. FICA stands for _____________ _________________ _________________
_____________.
Answers
How you are paid determines how you will pay into the IRS system.
If you are an employee of a company, the company known as your employer must pay in your taxes for you.
What is the Fed Income Tax System?The federal income tax system is really a pay-as-you-go kind of tax system.
The government wants to make sure you're paying as you go so you do not come up short at the end of the year.
Self-employment taxes are paid by you if you work for someone using your own equipment and either at your own work area or offsite from this person or company's actual building.
You are referred to as contract labor.
Most people in this type of situation usually make their payments to the IRS on a quarterly basis. That is every third month of the year.
A self-employed person pays more than another employee in taxes because basically, they are paying two parts.
When you work for someone, the employer is paying half of Social Security taxes on your behalf.
When you go to work as an employee for an employer, you will be given a W-4 Form to complete before you will ever get your first paycheck.
You can claim from zero up to however many dependents you may have.
If you claim zero, then the highest percentage, based on your income, will be withheld from your check. But, as you claim one, two, or more, the amount withheld from your check is lower, which means your net pay will be higher.
It is easier to have your employer take extra money out of your check and send it to the IRS on your behalf than it is to make estimated payments.
When the employer calculates your check, the first amount which is calculated is your gross pay.
Federal withholding is the term used for the amount of money withheld from your paycheck to cover the income tax you owe.
The calculation of how much withholding is taken out of your check is based on the information you provided in your W-4.
Social Security is a government-based savings system all U.S. citizens who work pay into.
When you reach 65 years of age, you will then receive a monthly check from Social Security.
Medicare is a government-based medical insurance system individuals can use after they reach the age of 65.
FICA stands for Federal Insurance Contributions Act.
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when setting a budget you should consider....
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CBA Corp. has grown significantly over the past year. One area that has plagued the controller of CBA is the reconciliation of supplies expense. The end-of-year supplies on hand totaled $20, purchases totaled $500, and supplies on hand at the beginning of the year amounted to $300. How much will CBA report as supplies expense for the current year
Answers
Answer:
the supplies expense for the current year is $780
Explanation:
The computation of the supplies expense is shown below:
= Beginning supplies balance + purchase made - ending supplies balance
= $300 + $500 - $20
= $780
hence, the supplies expense for the current year is $780
The same should be considered and relevant
And the above formula should be applied for the same
Tell me 3 characteristics of money?
Answers
1.) durability
2.) acceptability
3.) scarcity
4.) portability
5.)divisibility
6.)uniformity
choose any three u want! :)
Characteristics of Money.
Answer:
(a) Divisibility
(b) Limited supply
(c) Durability
More:
(d) Portability
(e) Acceptability
(f) Uniformity
These are the characteristics of money.
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robert is applying to colleges. there are many options for him to consider beyond just tuition and location. what can robert add to further define the problem and narrow the scope of his options?
Answers
To further define the issue and reduce the range of his options, Robert can add factors that should be taken into account, constraints, and assumptions.
What are constraints?In project management, a constraint is any limitation that specifies a project's bounds; the scope, for instance, is the upper bound of what the project is expected to achieve. The triple constraint or the project management triangle refers to the three main project constraints of schedule, cost, and scope.
The specific objectives, deliverables, and tasks that establish a project's parameters make up its scope. The schedule (sometimes used more broadly as "time") outlines the timetable for the delivery of those components, including the ultimate completion date.
Cost (also referred to more broadly as resources) refers to both the financial cap on the resources that can be used for the project as well as the overall spending cap.
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The activities of people traveling to and staying in places outside their usual environments for not more than one consecutive year for leisure, business, and other purposes is called _____.
transportation
travel
tourism
hospitality
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Answer:
Tourism is the right answer
98) What is a digital certificate? How does it work?
Short Answer:
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By verifying the identity of the parties involved and providing a secure method for exchanging data.
How we can digital certificate?A digital certificate is an electronic document that is used to verify the identity of a person, organization, or website. It contains information about the certificate holder, including their name, email address, and public key, as well as the certificate's expiration date and the name of the certificate authority that issued it.
Digital certificates work by using public key cryptography. The certificate holder generates a public key and a private key. The public key is included in the digital certificate, which is then issued by a trusted certificate authority.
When a user tries to establish a secure connection with the certificate holder, their browser or software checks the certificate to ensure that it is authentic and that it was issued by a trusted certificate authority. The browser or software then uses the public key from the certificate to encrypt data that is sent to the certificate holder.
The certificate holder can then use their private key to decrypt the data and respond in a secure manner. This ensures that any data transmitted between the two parties is protected from interception and tampering.
Overall, digital certificates play a critical role in ensuring the security of online transactions, including e-commerce and online banking.
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Which of the following are automatically withheld from paychecks?
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Customer relationship management software does not include information about
A. Current customers
B. Prospective customers
C. Former customers
D. Current Suppliers
Answers
Customer relationship management software does not include information about current customers, hence option A is correct.
CRM software is intended to track and manage customer interactions. This information contains contact information, purchasing history, and customer comments.
Software, on the other hand, does not often offer information about existing personnel. This is because CRM software is designed to handle external interactions, whereas HR software is designed to manage employee information.
Thus, "Customer relationship management software does not include information about" is A. Current Customers.
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Economic growth is often tied to investment in machinery, new technology, and education of the population. This is because
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Economic growth is indeed closely linked to investment in various areas, including machinery, new technology, and education. When companies invest in machinery, they can increase their production capacity and efficiency, which can lead to higher profits and job creation.
Similarly, investments in new technologies can enable businesses to innovate and develop new products and services, leading to increased competitiveness and market share. Additionally, investing in education can have numerous benefits, such as a more skilled workforce, higher productivity, and higher wages.
In terms of the impact on economic growth, these types of investments can contribute to increasing the overall level of economic output and productivity. This can lead to higher levels of GDP and employment, as well as greater prosperity for individuals and communities. Furthermore, by investing in these areas, businesses can position themselves to take advantage of new opportunities and adapt to changing market conditions, which can help to ensure their long-term viability and success.
Overall, investment in machinery, new technology, and education can have significant positive effects on economic growth. By supporting these types of investments, governments, businesses, and individuals can help to create a more dynamic and prosperous economy for all.
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1
The use of a wholesale warehouse in the chain of distribution [Q
Aenables direct selling from manufacturer to retailer.
B.enables production to be ahead of demand.
C. reduces the chain of distribution.
Direduces the cost of goods to consumers.
Answers
Answer:
B.enables production to be ahead of demand.
Explanation:
One of the benefits of a wholesale warehouse in the chain of distribution is that it enables production to be ahead of demand.
A warehouse generally represents a large house where goods/products are kept prior to their distribution for sale.
The use of a warehouse offers several advantages to producers. These include:
adequate protection and preservation of productsregular flow of goods irrespective of their period of productioncontinuity in the production process in order to stay ahead of market demandeasy handling of productsetc.Hence, the correct option is B.
The interest rate a company pays on loans depends in part on
A. its current ratio, debt-asset ratio, and operating profit as a percentage of global sales revenues.
B. its credit rating and the length of the term of the loan (1-year versus 5-year versus 10-year)--the longer the payback period, the higher the interest rate.
C. its debt-equity ratio and interest coverage ratio in the prior year.
D. whether its credit rating is above or below a B rating--all loans made to companies with a B or lower rating are made at prime plus 3.5%, while loans to companies with a credit rating of B+ or above are made at prime plus 1.5% [prime is defined as the "base" or "lowest" interest rate that creditors charge very low-risk customers who put up 200% or more collateral]
E. the extent to which its default risk ratio is above/below 3.0.
Answers
The interest rate a company pays on loans depends in part on credit rating and the length of the term of the loan the longer the payback period, the higher the interest rate.
Option B is correct.
What does the term "interest rate" mean?An interest rate tells you how much borrowing costs and how much saving pays off. As a result, if you're a borrower, the interest rate is the percentage of the total loan amount that you pay to borrow money.
What kinds of interest rates exist?The three main types of interest rates are as follows: the effective rate, the real interest rate, and the nominal interest rate. The stated rate at which interest payments are calculated is what is referred to as the nominal interest on an investment or loan.
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on a timeline, a milestone 14 years in the future will be to the ____ of a milestone 8 years in the future and to the ____ of a milestone 2 years in the future. left; left, right; left, right; right, left; right
Answers
Answer:
Right; Right
Explanation:
.
Refer to the following supply and demand schedules for the market for yo-yos.
Price Qd Qs
$1 100 10
$2 80 35
$3 60 60
$4 40 85
$5 20 110
What are the equilibrium price and quantity of yo-yos? Explain your answer, and show your work.
If price in the market is $2, will there be a surplus or shortage of yo-yos and how large will the surplus/shortage be? Explain your answer, and show your work.
If price is $2, will price tend to increase, decrease, or stay the same over time?
If the price in the market is $5, will there be a surplus or shortage of yo-yos and how large will the surplus/shortage be? Explain your answer, and show your work.
If price is $5, will it tend to increase, decrease, or stay the same over time?
Answers
The equilibrium price and the equilibrium quantity of yoyo is given as $3 and 60.
What is the equilibrium price?This is the price where the quantity of the good demanded is the same as the quantity of good that has been supplied. The equilibrium price is 3 dollars because at this point the Qs = Qd = 60
2. At a market price of 2 dollars, then would be a shortage in the market. at 2 dollars, demand = 80 while the supply of the product is just 35 hence this shows a shortage.
The shortage = 80 - 35 = 45
3. At 5 dollars there would be a surplus of yoyos. This is because the price is more than the equilibrium.
The surplus = 110 - 20 = 90
4. When the price in the market is 5 dollars then there would be a decrease in price. Given that there would be more suppliers hence there would be competition in the market among producers hence the price fall
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13. Many primate societies are complexly organized, enabling their members to form alliances, including by: a. rank. c. kinship. b. age. d. all of the above
Answers
Many primate societies exhibit complex social organization, allowing their members to form alliances based on various factors such as rank, kinship, and age.
In primate societies, rank refers to the hierarchical structure where individuals hold different positions of dominance or subordination. Higher-ranked individuals often have more privileges and access to resources, while lower-ranked individuals may have limited access. This ranking system influences alliance formation, as individuals may seek alliances with higher-ranked individuals for protection or support.
Kinship, or familial relationships, also plays a crucial role in primate societies. Primates often form alliances and exhibit cooperative behaviors with their close relatives, such as parents, siblings, or offspring. Kinship alliances can provide benefits such as shared resources, defense against predators, and increased reproductive success.
Age is another important factor in alliance formation among primates. Younger individuals may form alliances with older, more experienced individuals for guidance, learning, and protection. Older individuals may benefit from alliances with younger individuals by gaining assistance or support in various activities.
In summary, primate societies demonstrate complex social organization, and alliances are formed based on rank, kinship, and age. These factors contribute to the social structure and dynamics within primate communities, facilitating cooperation, resource sharing, and overall survival and reproductive success.
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when the money market is drawn with the value of money on the vertical axis, if the price level is above the equilibrium level, there is an
Answers
Answer:
There will be an increase in the price level.
Explanation:
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Do you believe the government should play a role in speeding up or slowing down the economy
Answers
Answer:
Yes I do believe they should because it is important to speed up economy's rate of growth
Help ASAP!!!! What is the most-possible answer?
Answers
Answer:
Community and junior colleges.
Explanation:
I don't know if im too correct but if i am, mark me brainliest?:)
Answer:
D - Collages
Explanation:
That is the only thing I know that gives degrees
how can a job (or occupation) impact your life?
Answers
Answer:
A job can affect your lifr in many ways;
-can get you money to live off of
-give you a sence purpose
-make friends
-make you better at goals and achivements
Explanation:
A large company in the communication and publishing industry has quantified the relationship between the price of one of its products and the demand for this product as Price = 150- 0.01 x Demand for an annual printing of this particular product. The fixed costs per year (i.E., per printing) =$50,000 and the variable cost per unit =$40. What is the maximum profit that can be achieved if the maximum expected demand is 6,000 units per year? What is the unit price at this oint of optimal demand?
Answers
Answer:
a. The maximum profit that can be achieved is $300,000.
b. The unit price at this point of optimal demand is $90.
Explanation:
From the question, we can obtain the following:
x = Maximum expected demand = 6,000 units
Price = 150 - 0.01 x = 150 - (0.01 * 6,000) = 150 - 60 = $90
Fixed cost per year = $50,000
Variable cost per unit = $40
Total variable cost = Variable cost per unit * Maximum expected demand = $40 * 6,000 = $240,000
Total cost = Fixed cost + Total variable cost = $50,000 + $240,000 = $290,000
Revenue = Price * Maximum expected demand = $90 * 6,000 = $540,000
Therefore, we have:
a. What is the maximum profit that can be achieved if the maximum expected demand is 6,000 units per year?
Profit = Revenue - Total cost = $540,000 - $240,000 = $300,000
Therefore, the maximum profit that can be achieved is $300,000.
b. What is the unit price at this point of optimal demand?
As already stated above, the following are given in the question:
x = Maximum expected demand = 6,000
Price = 150 - 0.01 x ........................... (1)
Substitute for x in equation (1), we have:
Price = 150 - (0.01 * 6,000) = 150 - 60 = $90
Therefore, the unit price at this point of optimal demand is $90.
what is sub overseers?
Answers
Answer:
(Civil sub-overseer) is Pre diploma in civil engineering. The program is designed to prepare competent general civil sub-overseers equipped with knowledge, skills and attitude especially, in the area construction Engineering & Technology of building construction, water supply, irrigation and road and trail bridges sectors.
Which strategy would most help minimize the risk of being underinsured?
A. Avoiding making claims
B. Choosing a low policy limit
C. Reducing the monthly premium
D. Choosing the maximum coverage
SUBMIT
Answers
Reviewing your home insurance coverage annually is one of the best ways to avoid being underinsured.
Check to see if your level of protection is adequate in light of the cost of your home, the value of nearby properties, and the level of competition in the local housing market.
What is the risk of not having enough insurance?
Being underinsured may result in financial losses for the policyholder in the event of a claim because the amount of the claim may exceed the insurance policy's maximum payout.Insufficient or incorrect coverage for your small business results in underinsurance.
How can insurance safeguard you financially?
The financial risk of something going wrong is shielded from you and your assets by general insurance.It can't stop something from happening, but if something unexpected happens that is covered by your policy, you won't have to pay the full loss cost.
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Answer:
choosing the maximum coverage.
Explanation:
moon limited is a monopolistic firm. it sells its current output quantity at a price higher than its marginal cost. which of the following is correct? The firm is making economic losses.
An increase in the firm's output will increase its profits.
The price at which the firm is selling produces no deadweight loss.
The firm would be allocatively efficient if price would equal marginal cost.
The consumers will be ready to pay more than marginal cost for a higher quantity.
Answers
The firm is making economic profits. An increase in the firm's output will increase its profits. The price at which the firm is selling does produce a deadweight loss. efficient if price does not equal marginal cost.
Since the firm is selling its current output at a price higher than its marginal cost, it indicates that the firm is making economic profits. In a monopolistic market, firms have the ability to set prices above their marginal cost, resulting in economic profits. Increasing the firm's output will not necessarily increase its profits. It depends on the demand elasticity and cost structure. If the firm faces a downward-sloping demand curve, increasing output may lead to a decrease in price and potentially lower profits. The price at which the firm is selling its product typically results in a deadweight loss. Monopolistic firms often have market power and charge prices above the marginal cost, leading to a reduction in economic efficiency and a deadweight loss.
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which type of unemployment is caused by job search and the difficulties of finding or filling a position?
Answers
The answer is frictional unemployment, is the type e of unemployment is caused by job search and the difficulties of finding or filling a position.
What is the straightforward description of unemployment?When a person has the ability and desire to work but is unable to do so, they are considered to be unemployed. According to the Bureau of Labor Statistics (BLS), unemployed people are individuals who don't have a job but are willing to work and have looked for one in the previous four weeks.
What does "unemployment" mean in India?A person is considered to be unemployed for the day if they do not engage in any paid labor, not even for an hour. Approach to Weekly Status: This method emphasizes the history of people who were without gainful employment or unemployed for even one hour on any day of the week prior to the survey date.
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The procedure requiring preparation of a prelisting of incoming cash receipts, with copies of the prelist going to the cashier and to accounting, is an example of which type of control? A. Detective. B. Corrective. C. Preventive. D. Directive.
Answers
The procedure requiring preparation of a prelisting of incoming cash receipts, with copies of the prelist going to the cashier and to accounting, is an example of a preventive control. Option C.
Preventive controls are designed to prevent errors or fraud from occurring in the first place. By having a prelisting of incoming cash receipts, the company can ensure that all cash received is properly accounted for and that any discrepancies can be detected early on. This helps to prevent any potential fraud or errors from occurring.
Additionally, the copies of the prelist going to both the cashier and accounting ensure that there is a separation of duties, which is another important aspect of preventive controls. By having different individuals responsible for different aspects of the accounting process, the company can reduce the risk of fraud or errors occurring.
In contrast, corrective controls are designed to correct errors or fraud after they have occurred, while detective controls are designed to detect errors or fraud after they have occurred.
Directive controls, on the other hand, are focused on directing or guiding individuals in their job duties, rather than preventing or correcting errors or fraud. So Option C is correct.
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loans requiring periodic payments of interest and principle are referred to as
Answers
Installment loans are those that call for regular interest and principle payments.
What are the two available funding options?The two main forms of external funding are equity financing and debt financing, the latter of which refers to funds that must be repaid, frequently with interest. Money is provided in exchange for a stake in the business and possible earnings in the future.
What is a good illustration of debt financing?Debt finance consists of bank loans, loans from relatives and friends, loans guaranteed by the government (such as SBA loans), credit cards, lines of credit, mortgages, and loans for equipment.
What steps are involved in repaying a loan with reoccurring payments?Loan amortization is the process of reducing debt over time through consistent principal and interest payments. For instance, if you pay a mortgage each month, part of the payment goes toward debt reduction and part toward interest.
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In 2017, Bathu sealed it's first corporate collaboration with an incubation hub in Johannesburg which led to the release of a further 1000 pairs of Mesh Edition sneakers. In that same year Bathu launched it's first limited edition Mesh Edition Sneakers in White, which sold out in days.
Bathu then bought it's first delivery vehicle and opened it's first store in Newtown, Jozi in 2018. The Newtown store was quickly followed by a second store in the heart of Pretoria, which later relaunched in a bigger space, providing customers with increased capacity and an innovative shopping experience. From there, demand grew and Bathu has since opened up additional stores in Port Elizabeth, Bloemfontein, Kimberley, Thohoyandou, Polokwane & Rustenburg where the responses have been nothing short of incredible. More recently, in January 2020, Bathu acquired a 3700sqm warehouse in Centurion. The warehouse is responsible for all aspects related to the production and distribution of the Batho products nationwide. At prese, the warehouse has a staff base of 68 people, (80% of whom are from Alexandra). This figure is expected to rise to 100 people by June 2020 to help combat the disastrous local unemployment figures by creating jobs and reigniting hope to families and individuals. Bathu hopes to achieve this target by continuing to use an end to end value chain approach encompassing a business model that maintains it's own vertical through direct production, sales, distribution and logistics. Bathu shoes are locally manufactured in Durban, with some of the components imported from Lesotho & the East. Bathu Shoes' long term vision is to have presence in Europe and South America, telling its' story in these parts of the world and be recognised and identified globally as a leading African shoe brand!
1.Differentiate between centralized and decentralized purchasing and identify with justification, the purchasing system that batho is using?
Answers
Bathu's purchasing system aligns with a centralized approach, where a central authority or department is responsible for making purchasing decisions on behalf of the organization.
Centralized purchasing and decentralized purchasing are two different approaches to managing the procurement process within an organization.
Let's differentiate between the two and identify the purchasing system that Bathu is using:
Centralized Purchasing:
In centralized purchasing, all purchasing decisions are made by a central authority or department within the organization.
The central purchasing department is responsible for sourcing, negotiating contracts, and making purchase decisions on behalf of the entire organization.
This approach allows for better coordination, standardization, and leveraging of purchasing power.
It can lead to cost savings through bulk purchasing, improved supplier relationships, and consistent procurement practices.
Decentralized Purchasing:
In decentralized purchasing, purchasing decisions are made by individual departments or locations within the organization.
Each department or location has its own purchasing authority and is responsible for procuring the goods and services it requires.
This approach provides greater autonomy and flexibility to individual departments but may result in duplication of efforts, inconsistent procurement practices, and missed opportunities for cost savings.
Based on the information provided about Bathu, it is evident that Bathu is using a centralized purchasing system. Here's the justification:
Bathu's acquisition of a 3700sqm warehouse in Centurion indicates that they have a centralized facility responsible for the production and distribution of their products nationwide.
The mention of using an end-to-end value chain approach, including direct production, sales, distribution, and logistics, suggests a centralized coordination of these activities.
The fact that Bathu shoes are locally manufactured in Durban, with some components imported, indicates a central authority overseeing the procurement process and sourcing decisions.
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Your client, Bo Regard, holds a complete portfolio that consists of a portfolio of risky assets (P) and T-Bills. The information below refers to these assets. E(Rp) 12.00 % Standard Deviation of P 7.20 % T-Bill rate 3.60 % Proportion of Complete Portfolio in P 80 % Proportion of Complete Portfolio in T-Bills 20 % Composition of P: Stock A 40.00 % Stock B 25.00 % Stock C 35.00 % Total 100.00 % What is the expected return on Bo's complete portfolio
Answers
A. 3.48 % B. 7.55 % C. 9.28 % D. 10.67 % <--Correct Answer
E(Rp) = (1/6)*0% + (1/2)*7% + (1/3)*12% = 9,33% or about 9,3%.
This is the correct answer.