The Big Apple Pizza Company, a manufacturer and distributor of
frozen food products, is introducing a new frozen Chicago-style
pizza. The new sauce for this pizza is a unique, special recipe and
it resulted in very positive taste test ratings in market research
studies. The supply manager is trying to decide if the company
should make or buy this sauce. The current forecast is for 115,000
total gallons of the sauce to be used over the estimated three-year
life of the product. The first year, 27,000 gallons are forecast
with 44,000 gallons each in years two and three.
Currently, Big Apple
purchases all of the sauce used in its products, ready-made, from a
single source, Top Tomato. The supplierA????1s production plant is
located 320 miles from Big AppleA????1s production plant, and weekly
truckload deliveries are currently used. The company buys
approximately 600,000 gallons of sauce per year from Top Tomato.
The sauce supplier has provided high quality, low-cost standard
pizza sauces to Big Apple and other pizza makers for over five
years. The current sauce supplier has quoted a delivered price of
$3.45/gallon for the sauce if a three-year contract is used.
Conformance to quality standards for Top TomatoA????1s sauce has been 99
percent and on-time delivery has been 95 percent.
manufacturing manager has stated that a facility and sauce-making
equipment are needed at an investment of $51,000 because the
company does not make any sauces. The manufacturing manager stated
that he had been considering laying off several workers because of
lower demand for frozen pot pies, so he was in favor of making the
sauce. The following direct costs have been estimated for making
the sauce. Typically, overhead costs for Big AppleA????1s production
facility are allocated to products at a rate of 120 percent of
This question was answered on: Dec 08, 2020
Buy this answer for only: $15
This attachment is locked
We have a ready expert answer for this paper which you can use for in-depth understanding, research editing or paraphrasing. You can buy it or order for a fresh, original and plagiarism-free solution (Deadline assured. Flexible pricing. TurnItIn Report provided)
Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .
About this QuestionSTATUS
Dec 08, 2020EXPERT
GET INSTANT HELP/h4>
We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.
You can also use these solutions:
- As a reference for in-depth understanding of the subject.
- As a source of ideas / reasoning for your own research (if properly referenced)
- For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
NEW ASSIGNMENT HELP?
Order New Solution. Quick Turnaround
Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.
WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN A DEADLINE.