Activity Based Costing Essay

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Question- BABI- Individual Assignment submission:
You have been assigned as a leader of a cross functional team of internal consultants to your CEO and the Board for your company.
Your company is faced with dwindling profit and constant chaos due to: 1. Intense competition from local competitors 2. New entrants from China/Vietnam with very low prices 3. Increasing inventory of great products which used to be fast moving 4. Lack of coordination with supply chain decisions and customer demand from CRM 5. Customers of least profit getting maximum attention and more profitable customers defecting 6. Sales Force placing unreasonable demands coupled with production interruption 7. Lack of integrated and coordinated
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Whether they are doing it to attract customers/ whether their production cost is low? 2. Where do they buy their raw materials from? 3. What are the flaws in their product so that we can enlighten our customers! – PRODUCT FLAWS CAN BE RECTIFIED 4. If the Raw materials are low cost there, can we outsource our production facility to there? 5. Can we create a competitor for them in china itself, so that they won’t invade our market? – WHAT MAKES U TELL THEIR PRODUCTION IS FROM CHINA? 6. Can we outsource our product production to another Chinese/Vietnamese company and defeat our local competitors?

Vendor managed inventory*
Release new advanced product and get first release customers and produce loyalty.*
Profit margin reduce and variable cost reduce.* Stock to cash*
3. Increasing inventory of Great Products that used to be fast moving.

1. WHAT IS OPTIMAL SIZE TO MAINTAIN UR INVENTORY? 2. Why suddenly my products have reduced in the sales? 3. Did my demand forecast lack in some assumptions? 4. Where is the bottleneck? And from when is this so? 5. Is there any new product introduced that might have decreased the trust in us? 6. R U GETTING REGULAR CUSTOMER FEEDBACK? 7. What are the insights my customer feedback giving me? 8. What is my holding cost? Is holding cost higher than my order cost? 9. Is my production still on? If so, should I reduce it until inventory is cleared?
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