Excel Online Structured Activity: Vanlandingham Robotics $-$ Purchasing Management

Emogene Edgerton is Chief Executive Officer of Vanlandingham Robotics. The robotics industry is a rapidly growing market with estimates of it moving from $$26$ billion in $2020$ to $$74$ billion by $2026.$ However, the competition is fierce. In the healthcare sector alone, there are over $200$ companies involved in robotics manufacturing.

Vanlandingham Robotics is a relatively new and small company. Despite that fact, Vanlandingham Robotics has a lot going for it$.$ Jodie Johansson is the Chief Engineer. Jodie is considered the best in the industry. Another valuable employee is Alfonso Abdalla, Chief Financial Officer. Alfonso is data driven and an expense management savant. He understands that with such high$-$quality competition, in order to make the profit margins Emogene desires then, revenue isn't enough. Low expenses are a must!

The key to success in managing expenses is to focus on Supply Chain Management; specifically, the area of purchasing management. The formula is simple, reduce purchase spend and profits will increase $($assuming all else remains constant$).$ How can Vanlandingham Robotics do this? They must increase their profits through smarter purchasing.

Alfonso decides he must talk with Aaron Lykes, Director of Supply Chain Management, about the actions required to ensure low expenses. As they discussed the matter Aaron said he would design a scorecard with the critical metrics so they can track the results. They agreed on the following metrics: Return on Assets $($ROA$),$ Monthly Inventory Turnover Ratio, and Annual Inventory Turnover Ratio. In addition, Aaron was going to assign Dori Lenser, Purchasing Manager, to complete a make$-$or$-$buy break$-$even analysis on some of their expensive supply items. Possibly, they will discover additional opportunities to reduce their purchase spend.

Accounting Information for Ending Inventory and Cost of Goods Sold:

Vanlandingham Robotics has an ending inventory of $$275,000$ as of December $31,2019$ and the following accounting information:

Accounting Information for Ending Inventory and Cost of Goods Sold:

Vanlandingham Robotics has an ending inventory of $$275,000$ as of December $31,2019$ and the following accounting information:

$\backslash$table$[[$MONTH$,$ENDING INVENTORY,COST OF GOODS SOLD$],[$January $2020,$$$245,000,$$$1,225,000$