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Financials and Questions
    Bradley Manufacturing - Income Statement (2011)
    Sales        $ 73,000,000    100.0%
     COGS    $ 51,100,000        70.0%
    Gross Margin        $ 21,900,000    30.0%
     Variable Expenses    $ 7,300,000        10.0%
     Fixed Expenses    $ 11,680,000        16.0%
    Profit        $ 2,920,000    4.0%
    Bradley Manufacturing - Balance Sheet (12/31/11)
    Current Assets
     Inventory    $ 5,110,000
     Accounts Receivable    $ 6,000,000
     Other Current Assets    $ 3,890,000
     Total Current Assets        $ 15,000,000
    Fixed Assets        $ 14,200,000
     Total Assets            $ 29,200,000
     Liabilities + Equity            $ 29,200,000
    Bradley Manufacturing makes replacement parts for police cars and fire engines.
    Fisher would categorize the
    1). Given the above financial information, calculate Bradley's Return on Assets using the
     worksheet on the "1). SPM - Base Case" tab (4 Points)
    One of Bradley's suppliers has proposed an outsourcing program for you to evaluate. The fee that the supplier would charge you would be added to your current COGS and decrease
    Gross Margin from 30.0% to 28.0%
     The program would cover all of Bradley's COGS and includes the following benefits:
     1). Increase Inventory Turns to 52 from it's current level with a JIT delivery service. The 52 Turns, however, would be based on higher COGS that includes the supplier's fee.
    
     2). Reduce Variable Expenses by $1,200,000 by eliminating the need for a
     third party warehouse that Bradley current rents to hold excess inventory.
     The warehouse savings includes the elimination of excess handling labor and transportation.
     You estimate, however, that you would need to add $100,000 of Variable Expenses
     due to the need for additional administrative staff to manage the program.
     You also would need to add $150,000 worth of Fixed Assets due to the...