Question 03

Recommend, define how to calculate – and then explain why it is best fit – your preferred statistic (Cases, Pallets, LBS, Eaches, Sales $, Gross Margin, Hits, Time Between Orders, or any other statistic of your choosing) that a given company should use to assign an ABC classification within an ABC-XYZ framework that will be used to determine target fill rates and safety stock levels, if that company is:

· Scenario 1: A high-volume, mature, breakfast cereal manufacturer with minimal new product introductions and discontinuations, and a continuous-flow manufacturing process

· Scenario 2: A long-tail distributor with a huge portfolio of items in the sales catalog, which they procure from outside vendors and OEM suppliers, and consolidate in warehouses to ship to customers who place orders with a large number of lines (items) per order

· Scenario 3: A mid-market, private equity-backed, growth-oriented consumer packaged goods manufacturer with a high new product introduction and discontinuation rate that results from an innovation strategy

(10 points per scenario; for the assignment of the ABC statistic to the scenario, and for the accuracy and completeness of your explanation as to why its best-fit for that business scenario.)

Question 04

You recently recommended new inventory targets for your chilled beverages and dry snacks company, based on some super fancy MEIO techniques that you heard about in the class of a brilliant, inspiring, and entertaining lecturer who you later found out was Jack Ryan’s smarter, better looking and dramatically more humble CIA counterpart.

The VP of Supply Chain was thrilled with your thought leadership; but, now she needs to translate those targets into operational and financial impacts. Your analysis resulted in inventory targets expressed as days of forward demand coverage.

The average COGS per case is $40. 50 cases fit per full pallet. Your recommended target average days of inventory, by product type, is:

· Snacks: 30 days

· Beverages: 7 days for Q1; 14 days for Q2 and Q3; 3 days for Q4

2019 forecasted sales, in COGS ($MM USD);

What is the average annual carrying cost of inventory, assuming a 9% cost of capital? Show your work or intermediate steps.

Question 05

For the same business scenario as in Question 04:

The warehouses have high enough ceilings to support three levels of racking, such that one standard GMA pallet footprint on the floor can have three actual pallets stored above that footprint (one on the floor, two more above).

How big should the warehouse should be, in order to ensure that the warehouse is large enough to handle peak storage needs and still be at no more than 85% full in order to provide some buffer for daily and weekly volatility in demand and replenishment?

Assume total warehouse footprint must be three times the storage footprint to account for aisles, docks, offices, etc.

Show your work or intermediate steps.

Question 06

For the same business scenario as in Question 04:

Assuming one production location and six regional distribution centers, and weekly plant to DC replenishments, if the average full pallet weighs 200 pounds, are you more likely to use LTL or TL on the plant to RDC lanes? Pro tip, a standard truck has room for 26 standard pallets on the floor. Assume you can only stack one additional layer of pallets on top, meaning the maximum pallets per truck is 52.

Show your work or intermediate steps.

Question 07

Using example numbers in an Excel spreadsheet you build, create a single chart per scenario (try Line, Stacked Bar, or similar) which shows the directional trend behavior of each of: Inbound Freight Spend, Stock Transfer Freight Spend, Outbound Freight Spend, Warehousing Spend, Working Capital Cost of Inventory, and Total Logistics Costs as the number of warehouses goes from 1 DC up to many, for each of the three business Scenarios described back in Question 03 (this problem is not related to Questions 04-06).

(10 points per scenario; for the overall direction of the cost bucket changes as number of DCs increase, and for capturing the nuances of the curvature of each cost trend (roughly linear, growing exponentially, economies of scale, etc))

Copy and insert an image or embedded chart into the .DOC response; do not send a separate Excel workbook.

Question 08

Create a Gantt chart (10 points) to show an implementation plan for the following transformation initiatives, utilizing the initiative costs, value, durations and dependencies as shown:

Which initiative has the earliest payback? (10 points)

What is the total NPV for the program assuming a 5-year NPV and 10% discount rate? (10 points)