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Which feature is most commonly associated with emergent coasts?

The payback period is ____________ years. 

If Clothes, Inc. decides to hold no safety stock, the expected annual stockout cost is $_____________. 

Now suppose that the Western Division has an opportunity to use its excess capacity to produce 15,000 headbands. If it makes these, then it cannot make any socks for the Eastern Division without giving up some of its (highly profitable) external sock business. Western’s incremental (variable) cost of producing and selling headbands is $3.65 per unit, and they are sold to external customers for $5.25 per unit. If the transfer price for socks remains at $4.00, then which product will the Western Division want to make in order to maximize its own profit?

Use the following information for the next five questions.  Clothes, Inc., has an average annual demand for medium polo shirts of 18,000 units. The cost of placing an order is $90 and the cost of carrying one unit in inventory for one year is $25. The stockout cost is $5 per unit. The purchase-order lead time is 6 days. We assume there are 360 days per year. Demand for every 6 days may vary with the following probability distribution:                                                                                                             Demand for 6 days: 240 units 270 units 300 units 330 units 360 units Probability (sums to 1.00): 0.15 0.2 0.3 0.2 0.15

Assume that next month’s costs and levels of operations in the Computer and Chip Divisions are similar to this month, the minimum transfer price at which both divisions would be willing to transact internally next month is $____________ per chip.

Texas Boots Inc. is considering the production of a new line of boots. Based on preliminary market research, management has decided that each pair of boots should be priced at $300. If management believes that the profit margin should be 30 percent of sales revenue, the target cost is $____________

The maximum transfer price per pair of socks that the Eastern Division would be willing to pay for these socks is $_______________________.    

Suppose that the Eastern and Western divisions are in different countries. The corporate income tax rate is 25% for Eastern’s income and 40% for Western’s income. If Western does sell the socks to Eastern, and if the taxing authorities are willing to allow any transfer price between $4.50 and $5.75, then Sportswear will set the transfer price at $________________to lower taxes.

Assume that next month’s costs and levels of operations in the Computer and Chip Divisions are similar to this month, the maximum transfer price at which both divisions would be willing to transact internally next month is $____________ per chip.