Interpreting and Employing Data to Build a Business Case
You and Your company: You are a new Supply Chain Analyst with the ACME Corporation. We design specialty electronics that are components in larger finished goods such as major appliances, automobiles and industrial equipment. Manufacturing is outsourced to low-cost suppliers due to the significant labor contribution and closeness to electronic component suppliers.
Your product: ACME Corp. designs a leading-edge family of devices branded as “Voice Assistants.” These are add-on boxes that many OEMs are using as plug-and-play devices in a wide variety of Internet-of-Things products. They are also sold directly to consumers as after-market items, but only for IoT devices that were built with our proprietary data-port.
Figure 1: Product line of ACME Corp Voice Assistant IoT Add-on Boxes
Your task: Your Chief Supply Chain Officer (CSCO) is requesting a review of supplier-to-customer processes as related to recent growth in our company and increasing demand for faster responsiveness to customers. One alternative is to decentralize our inventory into regional Distribution Centers; however, our ERP system is currently limited in the data available to make some of these decisions – and the output reports are very antiquated. Starting off the process, the CSCO directed that your Analysis Team use population data to allocate our national sales data to each region as a starting point. For this analysis, you are asked to focus only on the highest volume product, Voice Assistant IoT Add-on Box, 1GB, SKU # AB-1035-G. The challenge is now yours to complete some computations and interpret the results!
Your data: A detailed report from your ERP system along with secondary data from the U.S. Census Bureau is provided (reference: https://www.census.gov/programs-surveys/popest/data/data- sets.html). (Note: Sales to Alaska, Hawaii and Puerto Rico are handled by a 3PL provider and
) The consolidated EXCEL® file has incorporated several tasks already performed by the Analysis Team.
Detailed Requirements: Prepare a formal report (only this part below Logistics -Inventory) summarizing your results and providing recommendations that are supported by facts.
- Logistics – Inventory:
- Compute the missing Inventory Holding Cost Rate using the provided Operating Cost data and Value of Inventory in-stock. (Already Computed in the Excel sheet provided)
- Using the demand forecast pro-rated for each region based on population and the previously computed optimal inventory policy (e.g. EOQ and ROP), compute the anticipated number of orders per year placed by each regional Distribution (Already Computed in the Excel sheet provided)
- Describe managerial actions that could be taken to further improve on this optimal inventory policy.
- Discuss how the number of Distribution Centers throughout the United States will impact your inventory costs.
- Conclusion (To this part only)
- 5 bullets, no more than 5 words per bullet. (To this part only)