DANCEST 805 Lecture Notes - Lecture 1: Spend Analysis, Insourcing, Outsourcing
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Question 1
In order to compete effectively in todayâs increasingly globalised market, many companies have used features related to environmental sustainability to âwinâ new customers.
In relation to the company you work in or one that you are familiar with,
(a) Explain the term âsustainable business strategyâ and how this strategy relates to operations and supply chain management.
(8 marks)
(b) Identify an operations and supply chain-related "disruption" that impacted the company. What could the company have done to minimise the impact of this type of disruption prior to it occurring?
(7 marks)
(c) You have recently been appointed as the production manager of the company. To meet the demands of its global market, the company has set up production locations in two different countries. One is located in the USA while the other is located in a Southeast Asian country. You want to find out what is the productivity of the current operations at the two production locations. You have obtained the following results from the production supervisor (Table 1).
Table 1
*FC â Foreign Currency where $1 = FC 10
USA | Southeast Asia | |
Sales (units) | 100,000 | 20,000 |
Labour (hours) | 20,000 | 15,000 |
Raw materials (currency) | $20,00 | *FC 20,000 |
Capital equipment (hours) | 60,00 | 5,000 |
(i) Calculate the multifactor productivity figures for labour and capital together. Do the results make sense?
(5 marks)
(ii) Calculate raw material productivity figures (units/$) and explain any differences in these figures.
(5 marks)
Question 2
(a) A Japanese fast food restaurant, OiShi is concerned about its ability to provide quality service as they continue to grow and attract more customers. Its management has collected data from Friday and Saturday nights, its busiest times of the week. During these nights, about 75 customers arrive per hour for service. Given the number of tables and chairs, and the typical time it takes to serve a customer, the restaurant can serve on average about 100 customers per hour.
Analyse the restaurant service process in these nights where the data are collected and comment on whether the services are in the zone of service, the critical zone, or the zone of non-service? (Refer to Figure 2 when providing your answers)
Figure 2: Relationship between the Rate of Service Utilisation (r) and service quality
(4 marks)
The management anticipates that the restaurantâs demand will double in one year as long as it can provide good service to its customers. How much will the restaurant have to increase its service capacity to stay out of the critical zone?
(4 marks)
(b) Describe the characteristics of service processes of a typical fast food restaurant based on your service encounters.
(10 marks)
(c) Examine the strategies to manage service encounters. You should provide details on any TWO (2) possible customer-introduced variability in the service processes and propose THREE (3) accommodating strategies to effectively address these variabilities.
(7 marks)
Question 3
(a) Consider your organisation or one that you are familiar with that plays a role in the global supply chain network. This organisation can be a supplier, manufacturer, distributor, logistics service provider or retailer in a particular industry (e.g. fast-moving consumer goods, electronics, oil and gas, and pharmaceuticals). In your answer, you should relate the concepts and strategies in operations and supply chain management to the work environment.
Explain how the aggregate operations plan can help match supply with demand and optimise operational costs in this organisation.
(4 marks)
Provide TWO (2) strategies that can be used to influence demand and TWO (2) strategies that can be used to adjust capacity to match demand.
(8 marks)
(b) The development of web-based tools has allowed companies to collaborate on a larger scale and perform its operations and supply chain activities with greater ease. Demonstrate how collaborative techniques can be used to forecast demand. You should provide details such as the various stages of activities that are involved.
(8 marks)
Discuss the risks of being too reliant on the internet as a collaboration tool in demand forecasting and management.
(5 marks)
Question 4
Kee Wah Store sells a variety of exquisite European cookies and candies to the consumer market. The demand for cookies and candies is volatile and varies from month to month. The store orders from its suppliers. The lead time is normally one month, mainly consisting of the sea freight transportation time from Europe to Singapore. The store keeps a certain level of inventory at its warehouse.
The total demand for chocolate cookies is estimated to be 7,200 packets a year. The chocolate cookie packet is sourced from the supplier at $5 per packet and is sold to the end consumer at $15 per packet. It costs $100 to place an order to the supplier, and costs 20% of unit cost to store a packet of chocolate cookies for one year.
(a) Give FOUR (4) reasons why Kee Wah Store needs to maintain some inventory at its warehouse.
(8 marks)
(b) Examine the inventory situation for Kee Wah Store by applying the EOQ model to solve for order quantity and reorder point. What is the annual ordering cost, annual holding cost and total annual cost?
(10 marks)
(c) One supplier, Nee Ann Import Inc., approaches Kee Wah Store and proposes that it could shorten the lead time from one month to one week using airfreight.
What are the factors that Kee Wah Store needs to consider before deciding to accept or reject Nee Ann Importâs offer?
----- END OF PAPER -----
(7 marks)
I just need help with the chart at the bottom. Here is all the information for the company.
Accounts receivable for 2015__$300____
Total current assets= cash and marketable securities + account rec + inventory
1,542=347+a/r+895
Accounts rec = $300
Accounts payable for 2014__$319_____
Total Current Liabilities = Accrued Wages and taxes + Accounts Payable + Notes Payable
997 = 257 + Accounts Payable + 421
Accounts Payable = $319
c. Gross plant and equipment for 2015_$3,159______
Net Plant and Equipment = Gross Plant and Equipment â Depreciation
2,872 = Gross Plant and Equipment â 287
Gross Plant and Equipment = $3,159
d. Long-term debt for 2014__$132_____
Total Debt = Long-term Debt + Current Liabilities
1,129 = Long-term Debt + 997
Long-term Debt = $132
e. Common stock and paid-in surplus (250 million shares) for 2014 $300
Total Equity = Preferred Stock + Common Stock and paid surplus + Retained Earnings
1,472 = 30 + Common Stock and paid surplus + 1,142
Common Stock and paid surplus = $300
f. Total FA for 2015 $3,393
Total FA = Net Plant and Equipment + Other long-term assets
Total FA = $2,872 + 521
Total FA = $3,393
g. Net sales for 2015_______
Net Sales â Cost of Goods Sold = Gross Profit
Net Sales â 987 = 1,396
Net Sales = $2,383
h. Less: Cost of goods sold for 2014_______
Net Sales â Cost of Goods Sold = Gross Profit
2,018 - Cost of Goods Sold = 1,189
Cost of Goods Sold = $829
i. Less: Interest for 2015_______
EBIT- Interest = EBT
1,086 â Interest = 949
Interest = $137
j. Less: Taxes for 2015_______
Net Income = EBT â Taxes
644 = 949 â Taxes
Taxes = $305
k. Earnings per share (EPS) for 2015_______
Earning per share for 2015 = Net Income available to Common Stockholders / No of Common Stocks
Earning per share =566 / 250
Earning per share = $2.27 per share
l. Dividends per share (DPS) for 2014_______
Dividend per share = Common stock Dividend/ No of Common Stocks
Dividend per share = 219/250
Dividend per share = $0.88 per share
m. Book value per share (BVPS) for 2015_______
Book value per share= total common stockholderâs equity/No of Common Stocks
Book value per share= 1,789/250
Book value per share= 7.16
n. Net income $664
o. Increase in accrued wages and taxes $309-$257= $52
p. Increase in inventory â(895-797)= $ -98
q. Net cash flow from operating activities 664+287+52+62-41-98=$926
r. Increase in other long-term assets â(521-487)= $-34
s. Net cash flow from investing activities -343-34=-377
t. Increase in notes payable 492-421= 71
u. Pay dividends 98+219= 317
v. Net cash flow from financing activities 71+147-317= -99
w. Plus: Net income for 2015 $664
x. Preferred stock $98
Worldwide Widget Manufacturing, Inc.
Company | Industry | Comparison | |
Current Ratio | 2.2 times | ||
Quick Ratio | 1.1 times | ||
Cash Ratio | 0.35 times | ||
Inventory Turnover | 2 times or 1 time | ||
Days' sales in inventory | 135 days or 335 days | ||
Average payment period | 110 days | ||
Sales to working capital | 3 times | ||
total asset turnover | 0.6 times | ||
debt to equity | 1.1 times | ||
profit margin | 16.5% | ||
gross profit margin | 48.13% | ||
ROA | 8.78% | ||
ROE | 19.45% | ||
Dividend payout | 32% |
A. Use the information found in Worldwide Widget Manufacturingâs financial statements to calculate all of the listed financial ratios in the above table for your company. Then, for each ratio, provide a comparison of the companyâs result with the industry standards, indicating if your companyâs results are lower than, higher than, slower than, or faster than the industry standards.
B. Calculate your companyâs internal and sustainable growth rates.
QUESTION 1
_____ refer to the forces of change whose direction and sometimes timing can be predicted.
Uncertainties | ||
Trends | ||
Occurrences | ||
Scenarios | ||
Forecasts |
2 points
QUESTION 2
Management institutes, certification agencies, and headhunting firms are examples of specialized intermediaries for:
financial markets. | ||
markets for managerial talent. | ||
markets for products. | ||
auction markets. | ||
labor market. |
2 points
QUESTION 3
_____ involves analyzing markets for their potential size, accessibility, cost of operations, and buyer needs and practices to aid the company in deciding whether to invest in entering that market.
Search retargeting | ||
Unique selling proposition | ||
Rebranding | ||
First-mover advantage | ||
Market due diligence |
2 points
QUESTION 4
Consumer safari refers to the initiatives taken by Unilever executives to spend a day with consumers in their homes to:
understand how they use products. | ||
convince them to use more Unilever products. | ||
train them to make multiple use of their products. | ||
estimate how many products they use. | ||
help them set up cottage industries for their products. |
2 points
QUESTION 5
_____ refer to the forces of change whose direction and pace is largely unknown.
Uncertainties | ||
Trends | ||
Occurrences | ||
Scenarios | ||
Forecasts |
2 points
QUESTION 6
_____ are straight-line, one-factor projections from present to future.
Estimates | ||
Opportunities | ||
Scenarios | ||
Forecasts | ||
Plans |
2 points
QUESTION 7
The United States is separated from Nigeria by 5,840 miles and the Atlantic Ocean. According to the CAGE framework this is a case of:
emotional distance. | ||
economic distance. | ||
cultural distance. | ||
geographic distance. | ||
administrative distance. |
2 points
QUESTION 8
The GDP of France is 2.113 trillion USD whereas Sierra Leone's GDP is approximately 4.812 billion USD. According to the CAGE framework, this is a case of:
emotional distance. | ||
economic distance. | ||
cultural distance. | ||
geographic distance. | ||
administrative distance. |
2 points
QUESTION 9
_____ occurs when a function is taken out of one's country of residence to be performed in another country, generally at a lower cost.
Open sourcing | ||
Offshoring | ||
Exporting | ||
Importing | ||
Licensing |
2 points
QUESTION 10
Which of the following is true of acquisitions?
The acquiring company will be eligible for any financial help from the company whose shares it is trying to acquire. | ||
It affords the firm maximum control and has the most potential to provide above-average returns. | ||
The acquiring company enters into an agreement with the target business to pursue a set of agreed-upon goals while remaining independent organizations. | ||
The acquiring firm avoids the expense of establishing operations in the new country. | ||
The acquiring company gains control of another firm by purchasing its stock. |
2 points
QUESTION 11
Which of the following statements holds true for the ISO 9001:2008 certification?
Organizations which supply raw materials are barred from applying for the ISO 9001:2008 certification. | ||
Companies which meet the criteria of a minimum financial turnover can apply for the ISO 9001:2008 certification. | ||
The ISO 9001:2008 certification is a mark that a company's products and services have met quality standards. | ||
Companies that had achieved ISO 9001:2000 certification were exempt from being recertified to meet ISO 9001:2008 standards. | ||
ISO 9001:2008 certification specifically focuses on the environment. |
2 points
QUESTION 12
_____ refers to buying goods and services from foreign sources and bringing them back into the home country.
Open sourcing | ||
Offshoring | ||
Exporting | ||
Importing | ||
Farmshoring |
2 points
QUESTION 13
The _____ is the contract between the exporter and the carrier, authorizing the carrier to transport the goods to the buyer's destination.
letter of credit | ||
bill of lading | ||
customs invoice | ||
export declaration | ||
license |
2 points
QUESTION 14
_____ is the document by which the exporter tells the importer to pay a specified amount at a specified time.
Letter of credit | ||
Bill of lading | ||
Customs invoice | ||
Insurance certificate | ||
Bill of exchange |
2 points
QUESTION 15
Which of the following can also function as collateral against loans?
Certificate of origin | ||
Export declaration | ||
License | ||
Customs invoice | ||
Bill of lading |
2 points
QUESTION 16
_____ refers to the financing granted against collateral, which can be the imported/exported goods.
Angel funding | ||
Purchase Order Financing | ||
Secured financing | ||
Overdraft | ||
Cash advance |
2 points
QUESTION 17
Which of the following is a contractual mode of entry into a foreign market?
Greenfield ventures | ||
Licensing | ||
Joint ventures | ||
Acquisition | ||
Merger |
2 points
QUESTION 18
_____ refers to an organization that assists foreign companies in exporting their products to Japan by providing free-market entry information and business-partner matching as well as some subsidies.
Japan Bank for International Cooperation | ||
Japan External Trade Organization | ||
Development Bank of Japan | ||
Master Trust Bank of Japan | ||
Japan Post Bank Company |
2 points
QUESTION 19
Which of the following statements holds true for a nonentity joint venture?
In a nonentity joint venture, the partner with the smaller capital investment loses control over the joint venture after a period of two months. | ||
In a nonentity joint venture, each of the partners contributes capital and resources in exchange for an equity stake and share in any resulting profits. | ||
In a nonentity joint venture, the control of the joint venture is in the hands of the party which makes the larger capital investment. | ||
In a nonentity joint venture, there is no contribution of capital to form a new entity. | ||
In a nonentity joint venture the benefit gained is in the form of collective profits rather than individual profits. |
2 points
QUESTION 20
The _____ is a legal document issued by a bank at the importer's (or buyer's) request wherein the importer promises to pay a specified amount of money when the bank receives documents about the shipment.
export declaration | ||
license | ||
letter of credit | ||
bill of lading | ||
customs invoice |
2 points
QUESTION 21
_____ refers to the constellation of business, corporate, and international strategy elements, which managers must consider when making decisions.
Five Forces Analysis | ||
Cluster model | ||
Strategy diamond | ||
Porter's four corners model | ||
Strategic grouping |
2 points
QUESTION 22
Strategy implementation is the process of:
deciding which strategies to follow in order to diversify. | ||
performing all the activities necessary to do what has been planned. | ||
deciding the businesses in which an organization would compete. | ||
addressing the issue of the kind of strategies an organization would follow. | ||
devising plans to add value to the existing line of business. |
2 points
QUESTION 23
The _____ function requires monitoring performance so that it meets the performance standards established by the organization.
controlling | ||
leading | ||
planning | ||
organizing | ||
job design |
2 points
QUESTION 24
_____ refers to the sequence of activities that include the various steps of the supply chain as well as additional activities, such as marketing, sales, and service.
Value chain | ||
Differentiation | ||
Cost leadership | ||
Scope | ||
Homesourcing |
2 points
QUESTION 25
Outsourcing involves:
diversifying into a new business. | ||
the sale of products or services in one country that are sourced in another country. | ||
the company delegating an entire process to the outsource vendor. | ||
guiding the choice of markets that a firm competes in. | ||
performing a service by staff from within an organization and also by an external service provider. |
2 points
QUESTION 26
The U.S. fast-food chain Sonic will only open new outlets in states that are adjacent to states where it already has stores. This is an example of:
differentiation. | ||
increasing vertical scope. | ||
diversification. | ||
offshoring. | ||
increasing geographic scope. |
2 points
QUESTION 27
_____, which are a part of the SWOT analysis, assess the external attractive factors that represent the reason for a business to exist and prosper.
Strengths | ||
Weaknesses | ||
Threats | ||
Opportunities | ||
Strategies |
2 points
QUESTION 28
_____ refers to the number of different topographical markets in which an organization participates.
Geographic scope | ||
Value chain | ||
Differentiation | ||
Cost leadership | ||
Offshoring |
2 points
QUESTION 29
The first step in the planning process is:
establishing organizational objectives. | ||
formulating and ensuring the effective implementation of plans. | ||
the SWOT analysis. | ||
identifying multiple ways of achieving organizational objectives. | ||
monitoring the progress and evaluating the success of the plans. |
2 points
QUESTION 30
In Holland, KFC makes a potato-and-onion croquette, while in France it sells pastries alongside chicken. KFC:
has centralized its business processes to enable it to provide the services mentioned. | ||
assumes that consumer needs and desires vary by country. | ||
assumes that the world is flat. | ||
sells the same products in the same way in every country. | ||
is following the cost-leadership strategy. |
2 points
QUESTION 31
An automobile giant headquartered in the United States sells high-end bikes across the world. It wants to enter an emerging market. Customers in the market cannot afford the types of accessories used in the bikes. Thus the regional branch of the organization makes an autonomous decision to remove the accessories and to offer a toned-down version of the bikes to compete in the emerging market. This decision is accepted by the headquarters on the principle that the man on the ground is the best judge of local conditions. The above serves as an example of a(n):
decentralized organizational structure. | ||
reverse engineering. | ||
centralized organizational structure. | ||
reverse innovation. | ||
open sourcing. |
2 points
QUESTION 32
Nike products are manufactured in factories in countries such as China, Vietnam, Indonesia, and Mexico. Wholesalers, retailers, agents, and brokers are intermediaries who help in bringing the products to the consumer. These intermediaries bring the products from the factories to the consumers. They serve as an example of:
product branding. | ||
market positioning. | ||
market segmentation. | ||
channel of distribution. | ||
social marketing. |
2 points
QUESTION 33
Which of the following statements holds true for a global brand?
It refers to the brand name of a product that has worldwide recognition. | ||
It refers to the marketing strategy in which a firm marketing a product with a well-developed image uses the same brand name in a different product category. | ||
It refers to products that make the world less flat because of lack of recognition across countries. | ||
It refers to the product that is distributed nationally under a brand name owned by the producer or distributor. | ||
It refers to the changing the identity of a product, relative to the identity of competing products, in the collective minds of the target market. |
2 points
QUESTION 34
An organization that manufactures readymade cotton shirts sources the raw material from all over the world. It does this as a precaution against the failure of one or more companies to deliver the raw materials. The above serves as an example of:
open-sourcing. | ||
multisourcing. | ||
sole-sourcing. | ||
home sourcing. | ||
outsourcing. |
2 points
QUESTION 35
Which of the following holds true for product adaptation?
It refers to the company strategy of modifying an existing product in a way that makes it better fit local needs. | ||
It refers to the total composite of products offered by a particular organization. | ||
It refers to the strategy of taking the company's current products and selling them in other countries without making changes to the product. | ||
It refers to the creation of a new name, term, symbol, design, or a combination of them for an established brand with the intention of developing a differentiated position in the mind of stakeholders and competitors. | ||
It refers to the strategy of creating an entirely new product for a given local market. |
2 points
QUESTION 36
In marketing, market segmentation refers to the:
process of dividing a larger market into smaller markets that share a common characteristic, such as age, gender, income level, or lifestyle. | ||
combination of the four Ps of marketing that can be customized for different countries. | ||
commerce areas where because of price differences across countries, consumers are able to cross international borders to legally purchase products at lower prices than in their home country. | ||
commerce areas where vendors purposely deceive buyers by altering products and then selling them as branded products at a bargain cost. | ||
set of expectations, memories, stories and relationships that-taken together-account for a consumer's decision to choose one product or service over another. |
2 points
QUESTION 37
In marketing, which of the following holds true for counterfeit markets?
It refers to the process of dividing a larger market into smaller markets that share a common characteristic, such as age, gender, income level, or lifestyle. | ||
It refers to the trade of goods and services that are illegal in themselves and/or distributed through illegal channels. | ||
It refers to the commerce areas where, because of price differences across countries, consumers are able to cross international borders to legally purchase products at lower prices than in their home country. | ||
It refers to the commerce areas where vendors purposely deceive buyers by altering products and then sell them as branded products at a bargain cost. | ||
It refers to the secretive, unregulated (though often technically legal) trading in commodity futures. |
2 points
QUESTION 38
_____ refers to buying raw materials, components, or services from one supplier exclusively, rather than buying from two or more suppliers.
Open-sourcing | ||
Multisourcing | ||
Sole-sourcing | ||
Home-sourcing | ||
Outsourcing |
2 points
QUESTION 39
_____ refers to a situation which means that there is no more stock of the company's product.
Stock of record | ||
Stock-check | ||
Safety stock | ||
Stock call | ||
Stock-out |
2 points
QUESTION 40
Which of the following statements holds true for the indirect channel of distribution?
It refers to the shortest channel of distribution, consisting of just the producer and the end consumer. | ||
It refers to the combination of the four Ps of marketing that can be customized for different countries. | ||
It refers to a channel of distribution which contains one or more intermediaries between the consumer and the producer. | ||
It refers to a channel of distribution where the customer is the first and not the last link in the distribution chain. | ||
It refers to the channel of distribution where the company sells its products to the consumers in other countries via the internet without using local retailers. |