Supply Chain Performance Measurement and Financial Analysis
Supply Chain Performance Measurement and Financial Analysis Questions 1. “Performance measurement for logistics managers is relatively recent. Their focus was previously directed toward other managerial activities.” Do you agree or disagree with these statements? Explain your position. 2. It is generally recognized that organizations go through several phases on the path to developing appropriate supply chain metrics. Discuss the stages of supply development for supply chain metrics. Choose which of the stages of evolution you think would be most challenging for an organization. Explain your choice. 3. Using a spreadsheet computer software program, construct a supply chain finance model and calculate the profit margin; ROA; inventory turns; and transportation, warehousing, and inventory costs as a percentage of revenue for the following: Sales = $200,000,000 Transportation cost = $12,000,000 Warehousing cost = $3,000,000 Inventory carrying cost = 30% Cost of goods sold = $90,000,000 Other operating costs = $50,000,000 Average inventory = $10,000,000 Accounts receivable = $30,000,000 Cash = $15,000,000 Net fixed assets = $90,000,000 Interest = $10,000,000 Taxes = 40% of (EBIT-Interest) Current liabilities = $65,000,000 Long-term liabilities = $35,000,000 Stockholders’ equity = $45,000,000 4. Using the supply chain finance model developed for Study Question 3, calculate the impact on profit margin; ROA; inventory turns; and transportation, warehousing, and inventory costs as a percentage of revenue for the following scenarios: Scenario A Transportation costs increase = 20% Warehousing costs decrease = 5% Average inventory decrease = 10% Scenario B Warehousing is outsourced with the following: Net fixed assets reduced = 20% Inventory reduced = 15% Warehousing costs = $0 Transportation costs reduced = 5% Outsourcing provider costs = $2,500,000 5. Develop a strategic model to depict the scenarios given in Questions 3 and 4.