Assignment 3 - SCM AOL 2 (Trait 5 - Synthesize ideas into a coherent whole) 1. A company that produces specialized video equipment had half cost of goods sold last year of RM19.73 million. It has a total end-of-year asset of $13.8 million in 2018 and expected to increase by 19% in 2019. In 2019, the average value of inventory for raw materials, work-in- process, and finished goods are shown in the table below: Raw Materials RM6.1 million Work-In-Process RM2.5 million Finished Products RM3.7 million Supplement RM4.8 million If the company operates 48 weeks per year then the number of inventory turns, the days of supply in inventory and the percentage invested in inventory in 2019 would be: (3 Marks) AOL 2 (Trait 1 - Analyze information: data, ideas or concepts) 2. Explain in brief each of the following statement (3 Marks) a) Collaborative planning, forecasting and replenishment (CPFR) b. Sustainability Supply Chain 3. CASE STUDY Beating the Bad Weather external firns providing their total cost of goods sold and total ABC Ulsan Oil Field Equipment Manufacturers is competing aggregate inventory costs. The problem with this approach is the two finns provide a much wider set of materials to many with Daejeon Suppliers to provide process control computers other industries than just the material needed for this pipeline to the Sino-Russian gas pipeline under construction. Due to the remoteness of the pipeline construction, severe weather condi project The purchasing agent did not think it was appropriate to tions, and short construction season, the construction firm must compare the full company data when just a minor portion have the highest level of assurance that their suppliers can was required for this job. As such, the purchasing agent meet delivery dates requested that each firm provide the cost of goods sold and The firm is looking at the options of buying larger quantities of materials and storing them on-site, or obtaining smaller ship various inventories associated with just the material that would be provided. The following table contains the results ments on a more frequent basis. If the construction firm were to of this second data set buy in larger quantities, it would incur increased inventory costs due to the cost of storing the inventory and shrinkage. It would also have lost the use of capital funds fopportunity cost s sig. Construction nificant project funds would have been tied up in inventory Supplier 1 Supplier 2 Firm The firm has been trying to determine the best quantitative Cost of goods sold $4,500 000 $3,500,000 $7,500,000 method of comparing either purchasing larger or smaller material Raw materials 375,000 lots. The purchasing agent has suggested that they compare 295,000 each option's inventory turns and days of supply as part of the de- Work-in-process 25,000 30,000 150,000 cision-making process. The construction firm's management has Finished goods 750,000 700,000 145.000 tentatively agreed to use this input as it makes ts final decision Weeks work 52 52 With the general agreement, the management of the con struction firm has directed the purchasing agent to develop a Days per week 5 6 7 spreadsheet showing the results and to provide recom- mended way forward Based on the number of days worked, develop the days of To this end, the purchasing agent began to derive the raw supply and inventory turns values. data that would be used for this analysis. A major difficulty was Do you think this is a fair comparison of the alternatives? encountered in that the first request for data resulted in the Justify your answer. 52 (4 Marks)