A Grocery Chain Is Interested in Exploring the Impact Effective

question 114

Essay

A grocery chain is interested in exploring the impact effective supply chain management would have. Suppose that for every $1 of sales, 4% is profit, 50% is spent in the supply chain, and the remaining 46% is evenly divided between fixed and production costs. If the chain can save $1 in the supply chain it would take how many dollars of increased sales to have the same increase in profit? Assume that fixed costs are fixed so that the portion of increased sales allocated to fixed costs is instead profit (27% profit margin combined now).

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Definitions:

Conditioned Response (CR)

The learned reaction or response to a previously neutral stimulus, after the stimulus has been repeatedly presented along with an unconditioned stimulus.

Unconditioned Stimulus (US)

A stimulus that naturally triggers a reflexive response without prior learning.

Extinction

In behavioral psychology, the gradual weakening and disappearance of a conditioned response when the conditioned stimulus is presented without the unconditioned stimulus.

Spontaneous Recovery

A phenomenon in learning where a previously extinguished response reemerges after a period without exposure to the conditioned stimulus.