You were hired by the Widget manufacturing company, and since you recently graduated with a degree in logistics and supply chain management, your boss is hoping that you can h

3.2  Performance Measures for Supply Chain Management

Assignment: Case Study – Video Presentation

Case Study Overview

You were hired by the Widget manufacturing company, and since you recently graduated with a degree in logistics and supply chain management, your boss is hoping that you can help answer some questions that the president of the company has been asking.

The Income Statement and Balance Sheet for 2019 were provided to you, along with shipping and warehouse costs for 2018 and 2019.

Create a Professional Video Presentation

With the provided information and the list of questions below, produce a 3-5 minute  professional video presentation to present to the company president. Use ‘Studio’ with PowerPoint® slides to create your presentation. Review the information on the  Presentation Guide  for assistance.

Shipping and Warehouse Costs 

2018 and 2019 Shipping and Warehouse Costs

2018

Units Shipped

2018

Warehouse cost

2019

Units Shipped

2019

Warehouse Cost

Chicago

16,540

$  156,830

17,562

$  178,000

New York

7,562

$  63,417

8,562

$  65,263

Atlanta

27,506

$  246,315

28,263

$  265,856

Denver

15,685

$  151,975

16,585

$  176,000

Tampa

15,621

$  150,623

15,562

$  152,365

San Antonio

12,658

$  136,856

12,563

$  145,256

Bakersfield

9,526

$  72,632

10,125

$  78,526

Seattle

11,526

$  119,563

10,956

$  120,636

Income Statement

Income Statement 2019                             

Sales

   $    3,958,555

Cost of goods sold

   $        925,632

Gross Margin

   $    3,032,923

Transportation cost

    $       658,562

Warehousing cost

    $       725,632

Inventory carrying cost

    $       577,456

Other operating costs

    $       356,265

Total operating cost

   $    2,317,915

Earnings before interest and taxes

   $        715,008

Interest

   $        111,000

Taxes

   $          72,000

Net Income

   $        532,008

Balance Sheet

Balance Sheet 2019                     

Assets

    Cash

   $         708,562

    Accounts Receivable

   $         362,235

    Inventory

   $     1,592,356

    Total Current Assets

   $     2,663,153

    Net Fixed Assets

   $          823,653

    Total Assets

   $      3,486,806

Liabilities

  

    Current Liabilities

   $     1,726,333

    Long-term Debt

   $         423,365

    Total Liabilities

   $      2,149,698

Shareholders’ Equity

   $      1,456,235

Total Liabilities and Equity

   $      3,605,933

Questions

Questions to be addressed

1. What is the cost per unit shipped for each of the warehouses and highlight the warehouse with the best performance for 2018 and for 2019?

2. What is the difference in cost per unit for each of the warehouses and make sure to highlight the warehouse with the best and worst performance for each year?

3. Show the percentage difference in cost per unit for each of the warehouses and highlight the warehouse with the best and worst performance for each year.

4. Your boss told you that your company needs to close one warehouse so you need to recommend to the president which warehouse should be closed based on performance and justify.

5. Use the Income Statement and Balance Sheet and complete a Strategic Profit Model for the company to show the president.

6. What would have been the effect on ROA for 2019 if Transportation cost had been reduced by 10%? Produce an updated Strategic Profit Model for the company?

Notes

· To calculate the Total Expenses add total operating cost + Interest + Taxes

· Net Profit Margin and ROA should be in %

· Other Current Assets = Cash

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