Narragansett Yacht Corporation

In: Business and Management

Submitted By walkingtree101
Words 640
Pages 3
Narragansett Yacht Corporation

1.) What is the EOQ for each supplier?
Supplier A: √(1500)(2)(1000)69 = 208.5 209 units
Supplier B: √(1500)(2)(500)69 = 147.44 148 units 2.) EOQ Assumptions?
First, we are assuming that all values are known and remain constant. This, at first, seems applicable, except that there is mention of sales becoming seasonal. We can, however, assume that the lead time will remain constant (with either of the supplier they choose). The next assumption is that the price remains constant. This we can apply up until the 2% discount also mentioned later. The next assumption is that the whole order is delivered at once, which can be applied. And finally, that we are only discussing one item, which I believe we can assume as it is not mentioned that the suppliers deal with anything other than winches. 3.) How many orders should be placed with Supplier A or Supplier B and when are their respective reorder points?
Supplier A: 1500209 = 7.18 times

Supplier B: 1500148 = 10.1 times

Reorder Times: d x L d= 1500360 = 4.1667

Supplier A: 4.1667 x 10 = 41.7 units
Supplier B: 4.1667 x 20 = 83.3 units

4.) Total Inventory Costs:
Supplier A: (0.23)(300)(104.5) + 1000 (1500/209) = $14,387.50

Supplier B: (0.23)(300)(74) + 500 (1500/148) = $10,173.56

With the information developed so far, it would appear that Supplier B is the choice to make.

5.) Safety Stock: a. With safety stock, what are the new TIC’s?
Supplier A: Safety Stock Carrying Costs: (0.23)(300)(75) = $5,175
New TIC: 14,387.50 + 5,175 = $19,562.50

Supplier B: Safety Stock Carrying Costs: (0.23)(300)(150) = $10,350
New TIC: 10,173.56 + 10,350 = $20,523.56 b. Reorder Points:
Supplier A:
75 + (41.7/2) = 95.85 so 95 units

Supplier B:
150 + (83.3/2) = 191.65…...

Similar Documents


...CORPORATION * A Corporation is an artificial being created by operation of law, having the right of succession and the powers, attributes and properties expressly authorized by law or incident to its existence. Attributes of a Corporation * A Corporation is an artificial being with a personality separate and apart from its individual shareholders or members. * It is created by operation of law. * It enjoys the right of succession. * It has the powers, attributes and properties expressly authorized by law or incident to its existence. Advantages of a Corporation * The corporation has the legal capacity to act as a legal entity * Shareholders have limited liability. * Its management is centralized in the board of directors * It has continuity of existence. * Greater ability to acquire funds. Disadvantages of a Corporation * A Corporation is relatively complicated in formation in management. * There is a greater degree of government control and supervision. * Its requires a relatively high cost of formation and operation * It is subject to heavier taxation than others forms of business organizations. * Transferability of shares permits the uniting of incompatible and conflicting elements in one venture Classes of Corporations * Stock Corporation Corporations which have share capital divided into shares and are authorized to distribute to the holders of such shares dividends or allotments of the......

Words: 451 - Pages: 2

A Comparative Analysis of Toyota and the Yacht Company

...OF TOYOTA AND THE YACHT COMPANY A Comparative Analysis of Toyota and the Yacht Company Angela.Martin212 American InterContinental University A COMPARATIVE ANALYSIS OF TOYOTA AND THE YACHT COMPANY Abstract This is a comparative analysis of Toyota Industries Corporation and the Yacht Company. These companies contain similar problems but are located in different parts of the world. Both Companies pride themselves with excellent management skills and recognizing their responsibilities to citizens and local communities in promoting their products. Both companies present various differences. A COMPARATIVE ANALYSIS OF TOYOTA AND THE YACHT COMPANY A Comparative Analysis of Toyota and the Yacht Company Y.Co is a yacht company that specializes in the project management of new yacht construction for new and existing owners. They offer innovative yacht management programs and crew recruitment. Y.Co is an industry innovator company that introduces new levels of efficiency into yacht and ship management. Y.Co is a company that can assist individuals in purchasing or chartering a super yacht to travel anywhere in the world. Y.Co is known for their concentration on representing their clients. The core of Y.Co’s philosophy is team work. Their crew has partners, executive assistants, yacht sales and new business, yacht charters, travel and concierge, yacht management, yacht construction,......

Words: 551 - Pages: 3

The Corporation

...the corporation is very informative. There are several viewpoints throughout the documentary. In one part of the documentary certain corporations were call bad apples. Bad apples were the corporations that were flooding the corporation industry. Kmart in Enron were two of the corporations thar was considers bad apples. The documentary a corporation was said to be like a family. Asia K. Philson Everyone works together for a common in goal like a family would do. One important key factor is that certain corporations are exposing dangerous chemicals that harm us. Some believers feel we are in a major cancer epidemic due to harsh chemicals that one is exposed to on an everyday basis. The synthetic chemicals are not only causing cancers but birth defects and other toxic mishaps as well. Animals are born with defects and a child was born without eyes. The documentary explains that a corporation is psychotic If you're looking at the corporation as a person. The corporation is said to have all the characteristics of a psychopath. The people that are part of the corporation such as stockholders, workers, and Executives all have moral responsibility within a corporation. The CEO of Goodyear says that his job is very stressful and that he does not have complete control (Sam g) Since 1990 Goodyear has laid off over 20,000 employees and closed 8 plants. He explains that it's a decision that he never likes to make. Society views CEOs and other important people of corporations......

Words: 313 - Pages: 2

Nonstop Yacht Case Study

...Executive Summary This analysis was undertaken in an attempt to evaluate NonStop Yacht’s strategic direction in the Mega-Yacht industry due to the firm’s consistent inability to meet financial expectations. This case focused its efforts on answering. This poor financial performance has led the firm’s management to question whether or not a strategic alliance might be a beneficial alternative to their current business model. To address the firm’s current quandary, this case has answered the following central question: Should NSY strategically align with key industry players; or, would organic growth be a more beneficial option for generating the additional value needed to once again realign the company with both internal and external expectations? Analysis of the situation focused on three strategic issues found to be key in determining the firm’s strategic options: NSY’s core competencies; their internal environment which encompasses the firms operations, structure and culture; and how the industry trend of consolidation might affect the firm’s positioning. Based on a thorough analysis, it is recommended that NSY forgo an alliance with an industry player, instead focusing on organic growth. This growth is recommended to first begin by reinvigorating their e-commerce approach. NSY’s website must deliver on the value that was originally intended at the firms inception. Second, it is recommended that NSY steadily grow their brick and mortar footprint throughout......

Words: 4378 - Pages: 18

Yacht Club Membership Life Cycle

...Part 1 – written by Stephanie Executive Summary Continue the fast growing business from 2010s. The club is attempting to stretch its market share to 10% growth and soon to become one of the market leaders in the industry. Somewhat like Marina Boat Club, we own and operate a yacht club with providing a differing facilities and quality service. The guest can count on whether to have gourmet dinning in the lounge or join water sport training program & cruise party in Stanley Bay . Voice-over the brand and build up our reputation and strengthen to the audience’s perception is the front burner. From the coming year, a more mature membership plan will be developed. To catch the selected audience awareness, the promotion plan will be execute which comprises direct mailings, Internet, inserts, SMS, as well as joint promotion with Quicksilver. A series of social activities and training program would be held concurrently. From the year 2012, it is anticipated that there will be 100 members drawn from the local district in result ideally. Strong retention program will be followed up comprises Membership referral program and a series of exclusive discount offer. To deal with any changeable on customer behavior and trends, we decided to employ the database of America Express for analysis and assessment. The geared data will be used to match up the promotion plan accordingly. Anyhow the whole development will be completed by three years and review the process and results by......

Words: 1455 - Pages: 6

East Coast Yacht Case Study

...EAST COAST YACHTS INDUSTRIES 1. East Coast Yachts Financial Ratios | Current Ratio | 0.75 times | Quick Ratio | 0.43 times | Total Assets Turnover | 1.54 times | Inventory Turnover | 19.22 times | Receivables Turnover | 30.77 times | Debt Ratio | 0.49 times | Debt-Equity Ratio | 0.96 times | Equity Multiplier | 1.96 times | Interest Coverage | 7.96 % | Profit Margin | 7.51 % | Return on Assets | 11.57% | Return on Equity | 22.7% | 2. Performance of ECY to the industry as a whole. Financial Ratios | Value | Yachts Industry Ratios | | | Lower Quartile | Median | Upper Quartile | Current Ratio | 0.75 | 0.50 | 1.43 | 1.89 | Quick Ratio | 0.43 | 0.21 | 0.38 | 0.62 | Total Assets Turnover | 1.54 | 0.68 | 0.85 | 1.38 | Inventory Turnover | 19.22 | 4.89 | 6.15 | 10.89 | Receivables Turnover | 30.77 | 6.27 | 9.82 | 14.11 | Debt Ratio | 0.49 | 0.44 | 0.52 | 0.61 | Debt-Equity Ratio | 0.96 | 0.79 | 1.08 | 1.56 | Equity Multiplier | 1.96 | 1.79 | 2.08 | 2.56 | Interest Coverage | 7.96 | 5.18 | 8.06 | 9.83 | Profit Margin | 7.51 % | 4.05% | 6.98% | 9.87% | Return on Assets | 11.57% | 6.05% | 10.53% | 13.21% | Return on Equity | 22.7% | 9.93% | 16.54% | 26.15% | a. Current Ratio: Current Ratio of 0.75 times means that East Cost Yachts (ECY) has its current liabilities covered by 0.75 times or it has $0.75 in current assets for every $1 in current liabilities. This situation is not good for East Cost Yachts because......

Words: 2126 - Pages: 9


...Partnership or Corporation 1. What are some of the advantages and disadvantages of Thomas and Bryan forming a corporation? First of all, a corporation is a legal entity, created by the state, whos assets and liabilities are separate from its owners. It has some rights, duties, and powers of a person, as well as the rights to receive, own or transfer property. It is also important to mention that corporations are typically owned by many individuals and organizations who shares of the business, called stock. After this, I found some advantages or disadvantages for Thomas and Bryan if they want to form a corporation. Disadvantages: First of all, they will not be able to form a corporation in any State of the U.S. According to the law, there are some states in the U.S. that do not allow corporations owned by only two individuals. Information play an important role in any corporation, it takes a long time, as well as a lot of money to make annual reports with financial information of the office theys want to put, the flowers, and all that stuff, that is probably going to take a good part of the $10,000 of their initial contribution. Fees and formality will be some other disadvantages of turning the business into a corporation, considering that the Capital contributed was not a big amount. Finally, we cannot forget that corporations have potential double tax consequences (once when the company makes its profit, and a second time when dividends are paid to shareholders),...

Words: 834 - Pages: 4

East Coast Yachts

...Coast Yachts 1) Current Ratio=17,582,000/23,689,300=.74 times Quick Ratio= (17,582,000-7,363,700)/23,689,300=.43 times Total Asset Turnover= 234,300,000/130,338,900= 1.79 times Inventory Turnover= 165,074,000/7,363,700=22.4 times Receivables Turnover=234,300,000/6,567,600=35.7 times Total Debt Ratio= (130,338,900-66,169,600)/130,338,900= .49 times Debt-Equity Ratio= (23,689,300 + 40,480,000)/66,169,600=.97 times Equity Multiplier=130,338,900/66,169,600=1.97 times Interest Coverage= 33,591,000/4,212,600=7.97 times Profit Margin= 17,627,040/234,300,000=7.5% Return on Assets=17,627,040/130,338,900=13.5% Return on Equity=17,627,040/66,169,600=26.6% 2) Current Ratio=.74 times The current ratio for East Coast Yachts would be viewed as negative considering its below the industry median of 1.43 but above the lower quartile of .50. This ratio illustrates that the company has less current assets and overall liquidity to pay its current liabilities compared to the industrial average. Quick Ratio= .43 times The quick ratio for East Coast Yachts is above the industry median of 0.38 but less than the upper quartile resulting in a positive ratio for the company. This shows that the company has an efficient way of managing inventory in respect to liabilities. Therefore this ratio proves that the company is above average in relative liquidity when compared within their industry. Total Asset Turnover= 1.79 times The total asset turnover ratio for East Coast Yachts......

Words: 781 - Pages: 4

Narragansett Yacht Corportation

...Taylor NyBlom FIN 340 November 10, 2014 Narragansett Yacht Corporation 1. If ordered from Supplier A, the economic ordering quantity for standard 5-inch winches is 209 units. If ordered from Supplier B, the economic ordering quantity is 148 units. 2. Assumptions of the EOQ model include sales needing to be accurately forecasted, sales needing to be evenly distributed, and orders being received on time. These assumptions appear reasonable when applied to Narragansett Yacht. 3. A. If Narragansett buys from Supplier A, 8 orders will need to be placed each year. If they buy from Supplier B, 11 orders will need to be placed each year. B. For Supplier A, the reorder point in 50 units, and for Supplier B, the reorder point is 100 units. 4. The total inventory cost for Supplier A is $14, 388, and the total inventory cost for Supplier B is $10,174. Based on the information developed so far, Narragansett should use Supplier B. Even though Supplier B has a higher reorder point and more orders will need to be placed in one year, the total inventory cost is lower. 5. A. Assuming that the desired safety stock is currently on hand and does not need to be purchased, the total cost of ordering and carrying inventories using Supplier A is $19,563. The total cost of ordering and carrying inventories using Supplier B is $20,524. B. The introduction of safety stocks increases the reorder points. For Supplier A, the reorder point would now be 125 units, and for......

Words: 569 - Pages: 3

East Coast Yachts

...Parker University of the Potomac BUS 503 – Managerial Finance November 25, 2014 Professor Robert Shah Abstract Larissa Warren and Dan Ervin have been discussing the future of East Coast Yachts. The company has been experiencing fast growth, and the future looks like clear sailing. However, the fast growth means that the company’s growth can no longer be funded by internal sources, so Larissa and Dan have decided the time is right to take the company public. To this end, they have entered into discussions with the investment bank of Crowe & Mallard. The company has a working relationship with Robin Perry, the underwriter who assisted with the company’s previous bond offering. Crowe & Mallard have helped numerous small companies in the IPO process, so Larissa and Dan feel confident with this choice. Robin begins by telling Larissa and Dan about the process. Although Crowe & Mallard charged an underwriter fee of 4 percent on the bond offering, the underwriter fee is 7 percent on all initial stock offerings of the size of East Coast Yachts’ initial offering (Ross etal, 2013). Introduction Although Crowe & Mallard charged an underwriter fee of 4 percent on the bond offering, the underwriter fee is 7 percent on all initial stock offerings of the size of East Coast Yachts’ initial offering. Robin tells Larissa and Dan that the company can expect to pay about $1,800,000 in legal fees and expenses, $15,000 in SEC registration fees, and $20,000 in other......

Words: 1194 - Pages: 5


... | |6,000 | | | Investing—Purchase of Equipment | |34,000 | | | | | | |5. |Retained Earnings |123,000 | | | | Dividend Payable | |123,000 | EXERCISE 23-21 (45–55 minutes) |STEVIE WONDER CORPORATION | |WORKSHEET FOR PREPARATION OF STATEMENT OF CASH FLOWS | |For the Year Ended December 31, 2014 | | | | | | | | |Balance at 12/31/13 | |2014 |Balance at 12/31/14 | |...

Words: 11141 - Pages: 45

East Coast Yachts

...Ratios and Financial Planning at East Coast Yachts Yacht Industry Ratios Lower Quartile Median Upper Quartile Current Ratio 0.50 1.43 1.89 Quick Ratio 0.21 0.38 0.62 Total Asset Turnover 0.68 0.85 1.38 Inventory Turnover 6.85 9.15 16.13 Receivables Turnover 6.27 11.81 21.45 Debt Ratio 0.44 0.52 0.61 Debt-equity Ratio 0.79 1.08 1.56 Equity multiplier 1.79 2.08 2.56 Interest Coverage 5.18 8.06 9.83 Profit Margin 4.05% 6.98% 9.87% Return on Asset 6.05% 10.53% 15.83% Return on Equity 9.93% 16.54% 28.14% 1. Calculate all of the ratios listed in the industry table for East Coast Yachts. Current Ratio CA/CL = 0.742 Quick Ratio (CA - Inv)/CL = 0.43 Total Asset Turnover Sales/TA = 1.79 Inventory Turnover Sales/Inv = 22.42 Receivables Turnover Sales/AR = 35.675 Debt Ratio (TA - TE)/TA = 0.492 Debt-Equity Ratio TD/TE = 0.970 Equity Multiplier TA/TE = 1.970 Interest Coverage EBIT/Int. Exp = 7.974 Profit Margin NI/Sales = 7.52% Return on Assets NI/TA = 13.52% Return on Equity NI/TE = 26.64% 2. Current Ratio - Negative due to the fact that it falls below the Industry median and also because current liabilities are greater than current assets. Quick Ratio - Positive because it is greater than the industry median, however it still needs to improve because it is lower than......

Words: 841 - Pages: 4


...Introduction A corporation is a legal entity that is created under the laws of a state designed to establish the entity as a separate legal entity having its own privileges and liabilities distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter (i.e. by an ad hoc act passed by a parliament or legislature). Most jurisdictions now allow the creation of new corporations through registration. An important (but not universal) contemporary feature of a corporation is limited liability. If a corporation fails, shareholders normally only stand to lose their investment and employees will lose their jobs, but neither will be further liable for debts that remain owing to the corporation's creditors. Sole- Proprietorship A business structure in which an individual and his/her company is considered a single entity for tax and liability purposes. A sole proprietorship is a company which is not registered with the state as a limited liability company or corporation. The owner does not pay income tax separately for the company, but he/she reports business income or losses on his/her individual income tax return. The owner is inseparable from the sole proprietorship, so he/she is liable for any business debts also called proprietorship. A business can be set up in a variety of ways, ranging from a sole-proprietorship to a general partnership, an LLC to a......

Words: 1593 - Pages: 7

Narragansett Yacht Company

...Inventory Management 30 NARRAGANSETT YACHT CORPORATION Narragansett Yacht manufactures fiberglass sailboats which range from 18-foot day sailors to 50foot ocean racing yachts. The company was founded in Newport, Rhode Island, a hotbed of sailing activity, but high labor costs forced it to move its manufacturing operations to Corpus Christi, Texas, in 1990. The boat-building industry is very competitive and highly labor intensive, and profitability depends on getting the maximum efficiency out of the labor force. Narragansett has managed to keep its workforce nonunionized; this means that all of its employees can be shifted from task to task, and Narragansett can thus maintain flexibility. However, the price for this freedom has been a relatively high basic wage rate and a no-layoff policy. The no-layoff policy, in turn, makes it essential that the workforce is kept productively employed; this means that Narragansett simply must not run out of the various parts that go into the assembly of a boat. Therefore, a good inventory management system, which must track a large and varied inventory of parts ranging from inboard diesel engines and masts costing thousands of dollars each to screws and rivets costing only pennies each, is essential. Sailboats are built in sequential steps. First, the major fiberglass components are laid up in molds. To begin, each mold is cleaned and inspected, and if no damage is found, the mold is waxed with an agent which facilitates......

Words: 2145 - Pages: 9

The Corporation

...qualities, analysis of growth and history, exploration of impacts, and brief look at the future of the modern business corporation. The documentary defines a corporation as a legal person, explaining that is has most of the legal rights a person has such as borrowing money and managing property. The film was released around the time of major corporate scandals, such as Xerox, Enron, and WorldCom, and uses the metaphor “bad apples” to state that there are more than a few corporations that are bad. The film argues that if corporations were people, they would have psychopathic personalities. It then states that corporations have become a vessel which good and bad people can cause harm to society because of the way corporations have evolved and how they are protected. The Corporation film is concerned with the role corporations have in modern society its impact, or the corporate social responsibility. The film explores how corporations have been poisoning the earth as well as consumer minds and how the government is intended to look over and control these corporations. It looks into some of the unethical business practices and strategies executed by corporations and the externalities that are created to satisfy the main goal of the corporation: to maximize profit and market share. 2. Body A major social issue that was brought up in this film is the way that corporations treat foreign factory workers. The film is concerned with the rampant use of sweatshops by large......

Words: 913 - Pages: 4

The Rack Pack ... | Jawani Phir Nahi Ani | Android Auto