Large Bakers - Session 5 Essays

If you were to send a letter or package by courier, getting a quote based on the size/weight is another way of calculating the cost.

For the total revenues for each vessel the freight rates for Tapioca and for manufactured goods are multiplied with the amount of tons that are moved from one harbour to the other.

| |iv. Service quality cost savings – Controllable and relevant – With the 6 supplier option the company saves $100,000 in|

* Least expensive of the three strategies due to the lack of excess inventory and employee overtime

To this end, the initiative managers at Kraft created collaborative teams of experienced middle management across the board; members of the teams were chosen because of their proficiency in cash flow management. These teams of specialists help resolve situations that local managers may be unable to handle. Hence, the initiative team can be credited with creating an efficient protocol that has ensured all within the division are getting the adequate support needed to meet the company’s cost containment goals. Another area of value chain match up worth mentioning is, the tactics for paring down inventory, this process is also known within the Kraft organization as the “repetitive flexible manufacturing." The tactics optimizes the use of manufacturing lines that produce high-volume items at a regular frequency and in fixed quantities, Instead of responding daily to changing demand (Cooke, n.d.).

The next step would be for management to know precisely how their decision to downsize capacity would impact the firm’s future operating costs, and also identify specific areas in which the firm could achieve additional cost reductions. Additionally, the cost analysis would help forecast the firm’s operating costs and projected profits (or losses) for the upcoming fiscal year. However, before we can proceed with such analysis, an examination of how the various categories of Continental’s costs behave is in order.

Options for delivering product to customers can be done “In House” or provided by a 3rd party service provider. Currently Target enlists the services of Ryder trucking for the scheduling and dispatching of trucks from the Distributions Centers to the stores. Swift Trucking and Ruan Transportation provide the drivers and trucks that transport the trailers from the Distribution Centers to the stores. For the Fulfillment Centers, Target uses FedEx, UPS and the United States Postal Service. The problem posed in this paper is to determine the best way to get the product from the min fulfillment center to the customer in the most efficient way. Using the Linear Programing Model we can show costs for the distribution of customer packages from the various shipping options.

Variable cost changes along a $1 to $10 dollar scale swing from $27 to $31.50 in profit maximizing point. Total optimized profit ranges from $278,000 down to $171,125 when the variable cost changes while revenue remains stable hovering around $348,000. Elasticity swings from 1.019 to 1.436 and optimal unit count falls from 13,000 to 10,750 when the variable cost rises.

We also wanted to figure out the optimal reorder point and order quantity using the forecasted average demand of 18 jobs per day. We set the number of reorder point to 95 kits, accounting for the four day lead period and the level of safety stock we wanted to have.

Also, according to break-even analysis operating with the single mold and excluding warehousing costs, a minimum of 12,035 units must be sold to break even. Under a similar situation with the double mold, 15,507 units must be sold to break even, which is about half of the optimistic sales projection. Also under the optimistic sales projection, a positive return on investment is expected. Because the company is turning profit,less additional investment is required. Additionally under the pessimistic and expected situation, the company turns losses, and under the optimistic projections, Chef’s Toolkit only has a net income of 13% of its revenues. Selecting Preferred alternative According to the above information and the projected pro-forma statements, Dale Reid should not invest his money in the company. The company’s lack of current assets, high expenses and low per-unit revenue create an unfortunate and unprofitable investment in pessimistic and expected situations. Only in the optimistic production and sales does the company begin to turn profit, but this profit is low. Chef’s Toolkit needs desperate restructuring and additional revenue sources before Dale Reid should invest. Developing

The minimum cost is not $355, however, because of the constraint of not being able to deliver to more than four customers per truck. There, there is a minimum of two trucks that will be needed. Whether they are subdivided 2-4 or 3-3 does not affect the cost, because the per/pound rate is the same either way. This cost is:

The fast food industry uniquely supplies desired food products at almost lightning speed. Managing the supply chain function for the fast food industry can be quite challenging. There are many critical elements in supply chain management. For the fast-food industry, such as Wendy’s, in my opinion the most important elements are impacted by six critical element drivers: facilities, inventory, transportation, information, sourcing and pricing. However, the most important driver for franchisors and franchisees along with their vendors, to ensure optimal results is definitely pricing to control cost.

  1. The Nicholson will be able to reduce the Cost of Goods Sold from 69% to 65% of Total Net Sales as efficiency in manufacturing and inventory can be achieved.

* Supply chain represents approximately 55-58 calendar DOH of dry goods (30 in the CDC, 14 at the Distributor, 11-14 at the Supermarket or Independent Shops)

In order to remain successful Bakers Ltd will also need to increase the storage space size because of the increase in orders, more raw ingredients and materials are needed which is a problem as they will not be able to keep up with demand if they do not do so.