Supply Chain Rjct Task 2

In: Business and Management

Submitted By ollec1216
Words 2085
Pages 9
Budgets and pro forma statements were utilized to predict how much cash on hand would be available for capital improvements and production capacity increases by estimating future sales and expenses to estimate the amount of revenue the company would take in in each quarter, the expenses incurred each quarter and the amount of cash left over for use by the company. Estimating cash on hand at the end of each quarter allowed for the decision of increase of production capacity each quarter of the simulation results.
Pro Forma statements were utilized to ensure cash on hand was enough to cover future sales office openings and production increases, as well as allow the company to weather unforeseen economic events. Using a conservative approach to predicting sales and revenues allowed the company to accomplish this goal. However, the economic conditions of the simulation did not warrant this conservative approach and a much more aggressive cash management strategy could have been utilized to increase return on investment that was lost due to the amount of cash on hand sitting idle at the end of each quarter.
For the first quarter, the pro forma statements showed excess of cash on hand, so the decision was made to deposit a portion of excess cash to be put into a certificate of deposit so it would be generating interest income instead of sitting idle, since the projected revenue from sales and increased costs from marketing would leave ample cash flow for the increase in production capacity planned for the third quarter, even after the opening of the New York and Tokyo sales offices planned for the second quarter. $400,000 was placed in the certificate of deposit for an estimated interest income of $6,000. The initial production capacity investment in this quarter was kept to a minimum at $600,000 due the product cycle being in the research and development phase…...

Similar Documents

Supply Chain Task 1

...Supply Chain Rhonda Guyton Western Governor’s University Supply Chain A. Balance scorecard: Industry results for quarter: 4 | | Minimum | Maximum | Average | Kiera Computers | Total Overall | 0.00 | 1,133.44 | 86.79 | 9.04 | Financial Performance | -71.16 | 433.54 | 77.99 | 31.50 | Market Performance | 0.00 | 0.65 | 0.29 | 0.36 | Marketing Effectiveness | 0.31 | 0.97 | 0.75 | 0.82 | Investment in Future | 1.00 | 21.17 | 1.27 | 1.12 | Wealth | -1.63 | 4.34 | 1.49 | 1.10 | Human Resource Management | 0.62 | 0.82 | 0.77 | 0.67 | Asset Management | 0.04 | 3.46 | 1.64 | 1.17 | Manufacturing Productivity | 0.02 | 1.00 | 0.80 | 1.00 | Financial Risk | 0.00 | 1.00 | 0.92 | 1.00 | Balance sheet:Top of Form | | Balance Sheet | | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | Current Assets | Cash | 67,500 | 1,298,465 | 1,762,030 | 1,761,658 | + 3 Month Certificate of Deposit | 500,000 | 0 | 0 | 0 | + Finished Goods Inventory | 0 | 0 | 0 | 0 | Long Term Assets | + Net Fixed Assets | 1,100,000 | 1,054,167 | 1,608,333 | 2,637,500 | | = Total | 1,667,500 | 2,352,632 | 3,370,363 | 4,399,158 | | Debt | + Emergency Loan | 0 | 0 | 0 | 0 | Equity | + Common Stock | 2,000,000 | 3,000,000 | 4,000,000 | 4,000,000 | + Retained Earnings | -332,500 | -647,369 | -629,637 | 399,158 | | = Total | 1,667,500 | 2,352,632 | 3,370,363 | 4,399,158 | Bottom of Form | Income Statement:Top of Form | | Income Statement | ......

Words: 3441 - Pages: 14

Jct2 Task 2 - Supply Chain Management

...Task 2 A. Analyze your simulation results. Include the following in your analysis: 1. Explain how you determined your brand design decisions. In the first quarter, it was the goal of the company to focus on higher quality products, for a more discerning market willing to pay more. There was a secondary goal to use the prestige of the brand to incite interest in the lower end models that would be offered to the Workhorse level client. It was also the goal of the company to offer an affordable product that offered a higher value for the lower end of the market. With those goals in mind, customers needs were assessed for both sectors of the market to help determine what to include in each brand. For the Mercedes line, the Elite, any item that showed that there was either a clear or marginal need was added to the product. This same process was used for the Workhorse or Pro brand. One thing that was added to create value and differentiation from the rest of the market was each model was to have the fastest processor. Each quarter in the beginning we held almost 25% of the market, with three other competitors, we neither were behind or dominated it. Each Quarter would bring an updated model to each brand, with a focus on needs. Market research would tell of where items hit or missed the mark, and the brands would be redesigned to compensate for the misses. As the fourth quarter approached it became clear that the traveler market was interested in the type of products the company......

Words: 2822 - Pages: 12

Supply Chain Task 1

...JCT2 Supply Chain Task 1 B 1. Evaluating my use of budgets and pro-forma statements to plan for production capacity In Ralph Estes's Dictionary of Accounting, a pro forma financial statement is defined as "a financial statement prepared on the basis of some assumed events and transactions that have not yet occurred." (Estes, 1981) Historical financial statements are used to measure an organization's past financial performance and condition. Without historical financial statements, financial analysis and evaluation would not be possible and management, board members, investors, and customers would be largely in the dark about how well an organization has done. Pro forma financial statements are similar to historical financial statements in appearance and use, except that they focus on the future instead of the past and are based upon assumptions rather than hard fact.  According to CliveVlieland-Boddy “the construction of pro forma statements is based upon detailed financial projections and the historical relationships between different income statements and balance sheet accounts. A set of current financials serve as the foundation on which the pro forma will be built.” (Vlieland-Boddy, 2011) With starting a new company and brand, I did not have much in the way of current financials to use for helping create the pro forma statements initially. When I did start receiving the reports, the information was hard for me to use for projections due to the lack of a track......

Words: 3650 - Pages: 15

Supply Chain Task 1

...Task 1 Assessment for Supply Chain Management B. I named my microcomputer company GigaJet. I don’t know if it is true for everyone that opens a business, but I find that naming a business is a very difficult task. The company name is reflective of what I wanted shareholders to feel when they saw and used the product; a microcomputer that has a lot of storage, “Giga”, and is fast and can go anywhere, “Jet”. Within the simulation each business was required to pick two segments to manufacture the microcomputers for. At GigaJet I chose to focus the manufacturing of our products to supply the workhorse and traveler customers. I chose these two segments because they had similar customer needs and wants, as well as a high potential demand. The next step within the simulation was to choose which markets to sell the microcomputers to. I developed a simple spreadsheet to analyze what markets would be the best fit for the company’s long term success. This spreadsheet was developed by multiplying the potential demand in each segment by the price that customers were willing to pay. From the following spreadsheet, I determined that the best markets for GigaJet to sell to were in the North American and European markets. |North America|Europe|Asia|South......

Words: 4234 - Pages: 17

Supply Chain Rjct Task 3

...that is composed of manufacturers, supply chain partners, distributors and financiers who try to stay financially independent but work closely with each to ensure each other’s success.  In Japanese, the word keiretsu means “group.”  In business sense, the word is sometimes used as another word for partnership or alliance. Using this strategy will help your company by assisting in establishing stable, long-term partnerships, which in turn will help them to focus on core business requirements needed to assist with maintaining your products and production in several different aspects. Because the product that is being developed here is an intricate electronic device, there will be several partnerships that we will develop over time such as parts distributors and other components of our products (http://www.investopedia.com /terms/k/keiretsu.asp#axzz2IwCjpAVn). Using this strategy will also help us with the management of our finances through assistance with other departments and entities that specialize with financing. Even though this strategy is meant to sustain stability, this same stability can sometimes become an issue and cause problems with us being the manufacturer by not responding quickly to changes in the economy, culture or technology. Typically companies using this strategy organize around their own trading companies and banks. Each company using the keiretsu strategy is capable of controlling nearly every step of the economic chain in a variety of industrial,......

Words: 6539 - Pages: 27

Task 1- Supply Chain

...Tiffany S. Williams, MBA 06/01/2012 My Mentor: Megan Murphy Houston, Texas- Central Standard Time Task 1 Supply Chain Management Simulation Analysis (B): With utilizing the pro-forma balance sheets revealed that I did not use the correct approach. My overall market share for traveler was around 94% however in the workhorse line my overall market share was only around 42%. I made a decision to invest $500.000 into a certificate of deposit which proved to be disastrous. I only opened one office in North America and because of my neglect in opening an additional office, I was not a leader in the market share. It is vitally important to utilize the pro-forma balance financial statements as they are used to determine the outcome of previous decisions that one has made. Earlier, in the first quarter, I had a negative $294,000 that required that I take an emergency loan of $300,000. This was disappointing to me because and made me understand that I needed to make some adjustments especially since I was only at 3% market share with the workhorse line – I dropped the line completely. I made the decision to drop the workhorse after reviewing my profit and loss statements. I viewed this as a low profit item that was taking away from cash assets that could be best used to catapult our traveler line and this was the overall cause of having to take the emergency loan with the loan shark. My overall goal was to regain market share and then work to defend it. I eventually......

Words: 6226 - Pages: 25

Supply Chain Task 3

...The investors of Best Tool Company (BTC), a company established to manufacture and sell electric drills, saws, and sanders, have requested a supply chain strategy which is outlined below. A.) In considering options for supply chain strategy, the pros and cons of various methods should be considered. In this section, the Keiretsu networks, Virtual Company, and Vertical Integration methods will be discussed. Keiretsu networks are business networks composed manufacturers, distributors, and financiers. In this model, the manufacturers may choose to be partial owners of the suppliers and the suppliers become part of the company coalition (Heizer & Render, 2011). The benefit of a Keiretsu strategy is the mutually beneficial relationship through shared goals which provides a level of trust. This network strategy is compelling in that the risk that is normal in supply chains is spread somewhat. Also, the flexibility provided by this strategy is impressive. Short-term relationships can be developed with multiple vendors which assist in negotiating reduction of costs paid to these vendors. Long-term relationships will be developed over time with a few key vendors which provide security in the delivery of high quality products. A few disadvantages to consider are costs involved in maintaining the network when multiple vendors are involved. It is important to actively manage these relationships to avoid increased costs of goods or services and to monitor quality. A......

Words: 3419 - Pages: 14

Wgu Supply Chain Task 2

...Task 3 A. Recommend, with sufficient support, the adoption of one of the following strategies by the power tool company: a Keiretsu network, a virtual company, a vertical integration, or a different supply chain strategy. An efficient supply chain is fundamental to the success of any organization. The expense of the supply chain is usually an organizations largest cost therefore implementing a strategy that effectively minimizes costs while maintaining product quality is an effective way to increase profits. The best way to minimize costs and maximize product quality is to adopt a lean operations strategy that includes just in time (JIT) initiatives. Central to the JIT technique is continuous problem solving. JIT requires that items and materials are ordered only when needed minimizing inventory. When inventory is minimized wasted costs in layout, quality, and procurement are easily spotted and immediately dealt with. With JIT very few suppliers are chosen creating large commitments to the organization. The suppliers should also use JIT and offer their expertise in design and quality control to the supply chain. Since the owners of the power tool company are willing to own or invest in any component of the supply chain I would recommend they initiate a Keiretsu. A Keiretsu is a company coalition which includes few key suppliers and secondary suppliers. The power tool company would support key members of the Keiretsu through ownership or loans. The......

Words: 2877 - Pages: 12

Supply Chain Task 1

...that a more aggressive expansion could have taken place while keeping a positive cash balance. It was determined in the fourth quarter that if this aggressive expansion had taken place in the previous two quarters, the ability to meet customer demand would have been better met. Although cash flow remained positive throughout the year, each quarter the forecasted sales fell far short of the actual demand for product as you can see in figure 2, where the total actual sales units of 7,800 was far less than the demand of 14,378 units. This was not only a loss of sales revenue; it had the potential to frustrate new customers. In the fourth quarter when forecasting the number of units to be sold, it was realized that even though there were 16 sales people in three office locations, the production capacity was only 4,875 units even though the potential to sell more was inevitable. WCC Technologies failed in expanding their production facility quicker so it was decided in the fourth quarter after looking at the pro forma statements, to invest $2 million in the expansion of the production facility. B2a In practice Just-in-time (JIT) and lean operations methods are very similar and the terms are often interchangeable, but regardless what strategy is used, three issues are fundamental to the operation managers; eliminate waste, remove variability or problems, and improve throughput. Just-in-time (JIT) manufacturing is a production model where items are created to meet demand......

Words: 2895 - Pages: 12

Supply Chain Task 2 Wgu

...research for quarter IV to see how the market was viewing our products. In quarter IV the redesign of the office PC turned out to be the right decision according to the research report. Abacus was second among the “Top 8 Brand Judgment” for the office product and number one for the engineering market. For quarter V, I decided to make small improvements to our models and released a new generation for the office and the engineering market. In quarter V Abacus was second when it came to overall market share for the office market. Abacus also had increased the market share in the office market from 28 percent to 33 percent. In their engineering department, Abacus was the leader and had increased the market share 28 percent to 39 percent. 2. Discuss whether you would change the target markets you selected if given the opportunity to repeat the simulation. Abacus decided to focus on office and the engineering and manufacturing segment during the simulation and forgo the traveler segment. If we had a chance to do the simulation again, we would make the same decision (Innovative Learning Solutions). Demand: We choose the office market by offering a Workhorse model because it had the largest demand regardless of any geographical location. Total worldwide demand for the Workhorse were 25,471 units. We also chose to provide a Mercedes to the engineering and manufacturing market because it had the second highest worldwide demand with a total of 14,877 units. We chose......

Words: 3386 - Pages: 14

Supply Chain - Task 1

...JRT2: SUPPLY CHAIN – TASK 1 SIMULATION ANALYSIS TROY A. KRUMWIEDE WESTERN GOVERNORS UNIVERSITY JRT2: SUPPLY CHAIN – TASK 1 SIMULATION ANALYSIS Simulation Analysis PrimeComp is a company introducing a new line of microcomputers throughout the world market. It is PrimeComp’s mission to provide its customers, from around the world, with quality computer systems that meet specific business requirements at the best possible value. During the first quarter of operation, PrimeComp’s management reviewed market research to develop two brands in two target segments. PrimeComp’s primary brand, Champion, would be marketed to the Mercedes target market. A second brand, Globetrotter, would be designed for the secondary market, Traveler. To best reach PrimeComp’s customers, it was determined that two sales offices would be necessary. The first sales office was located in New York, North America and the second would be opened in Tokyo, Asia. These two locations revealed the most potential for the two brands and target markets. A factory was built that would create approx. 3,250 units per quarter. PrimeComp generated financing by issuing closely held stock. A total of 20,000 shares of common stock were issued at 100 per share to the owner and team members. This investment will be used for all first quarter expense and the unused balance will be carried over to quarter two. During the second quarter we will need to hire sales, services, and factory worker personnel. ......

Words: 3662 - Pages: 15

Supply Chain Task 1

...November 10, 2013 JCT Task 1 B1 Pro-forma statements is a financial statement showing the forecast or projected operating results and balance sheet, as in pro forma income statements, balance sheets, and statements of cash flows. I did not use pro-forma statements in the beginning and it became nearly impossible to calculate my future expenses. If I had used the pro-forma statement, I would have been much more successful with the latter outcome by having funds available and less overhead. A budget statement consists of an operating statement, including other economic flows, a balance sheet, and a cash flow statement, which I did not use until I realized that my company was in trouble after the third quarter. If I would have used my budget statement appropriately in the beginning, the company would have seen proper growth and capital gains. The negative outcome of not using budget statements was clear throughout the last three quarters. My negative cash flow became excessive in quarter two due to over production of my products. Therefore in quarter three I had extremely high inventory holding cost and excess capacity costs. I tried to adjust in quarter four for the price per unit to compensate for my negative cash flow but I was already too far in the negative. Now that I have learned how the pro-forma statement works, I would have been able......

Words: 1229 - Pages: 5

Jct 2 Supply Chain Task 1

...JCT 2 Supply Chain Task 1 During the course of this simulation, I tried to make conservative decisions that would be the most profitable for me and for my shareholders. I started by selecting a simple name for the company that could be easily promoted and would be become dated. As stated in the mission statement, my company’s goal was always to deliver the latest in computer technology to my customers. One of the ways that I was able to do this was research. I paid close attention to the research into what the market wanted in their computers. Not only did I pay close attention to the needs of the customers, but I was also receptive to the prices they were willing to pay. Since manufacturing and office based companies were willing to pay more, I selected those two market targets, Workhorse and Mercedes, and choose to ignore the Traveler. In the first quarter, money was not abundant, so I made the choice to offer a small compensation package for my employees. During the first quarter, my employees received only one week of vacation. They were given expanded coverage insurance and I contributed a small 5% to their pension. I realize that my compensation was not as good as my competitors. This is one of many problems that I corrected in later quarters. I had the opportunity to open two sales offices. I decided that I needed to have one sales office in the United States, so opening the office in New York was an easy decision. The other location for my sales......

Words: 2074 - Pages: 9

Supply Chain Task 1

... JCT2-Supply Chain Robert Hilton January 2014 Simulation Results Cumulative industry results for last four quarters ending in quarter: 4 |   | Minimum | Maximum | Average | Realtech | Total Overall | 0.00 | 916.17 | 25.93 | 0.00 | Financial Performance | -72.01 | 266.30 | 24.14 | -5.20 | Market Performance | 0.00 | 0.68 | 0.27 | 0.17 | Marketing Effectiveness | 0.00 | 0.82 | 0.58 | 0.60 | Investment in Future | 0.00 | 298,149.15 | 299.69 | 1.77 | Wealth | -2.01 | 6.34 | 1.16 | 0.54 | Human Resource Management | 0.00 | 0.82 | 0.61 | 0.78 | Asset Management | 0.00 | 2.36 | 0.95 | 0.46 | Manufacturing Productivity | 0.00 | 1.00 | 0.64 | 0.47 | Financial Risk | 0.00 | 1.00 | 0.79 | 0.87 | Balance Sheet |   | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | Current Assets |   Cash | 451,285 | 487,834 | 1 | 1 | + 3 Month Certificate of Deposit | 19,000 | 19,000 | 269,000 | 269,000 | + Finished Goods Inventory | 0 | 755,487 | 1,149,025 | 1,097,024 | Long Term Assets | + Net Fixed Assets | 1,100,000 | 1,054,167 | 2,108,333 | 3,116,667 | | = Total | 1,570,285 | 2,316,488 | 3,526,359 | 4,482,692 | | Debt | + Emergency Loan | 0 | 0 | 572,691 | 2,313,173 | Equity | + Common Stock | 2,000,000 | 3,000,000 | 4,000,000 | 4,000,000 | + Retained Earnings | -429,715 | -683,512 | -1,046,331 | -1,830,481 | | = Total | 1,570,285 | 2,316,488 | 3,526,359 | 4,482,692 | Income Statement |   | Quarter 1 | Quarter 2 |......

Words: 2213 - Pages: 9

Task 3 Supply Chain

...Task 3 Supply Chain Strategy by Daniel Alcaraz 11-7-11 A) Keiretsu Network: There are several choices of strategies we can adopt when we are talking about the supply chain of a company. The first strategy I would recommend and adopt over vertical integration or a virtual company which I will explain later is the strategy of a Keiretsu Network. It was founded by Japanese manufactures in which its part of a collaboration and part purchasing from suppliers and its also part vertical integration. The manufactures are major financial supporters of the suppliers through their ownership or loans. The suppliers become a major part of the company's coalition called Keiretsu. Any members of this network are assured long term relationships and are expected to to behave as partners and provide their expertise on quality production to the manufacture. Members can also have Keiretsu father down the supply chain which makes second and even third suppliers apart of this coalition. Finding the right strategy for our company will be the start of our supply chain strategy. The main three are the Keiretsu network, virtual company, vertical integration. All three have their advantages and disadvantages. An example of a Keiretsu network would be our company working closely with a supplier, such as a motor manufacturer but not necessarily owing their company. A virtual company is network of independent......

Words: 2420 - Pages: 10