ROGRAMME: BACHELOR OF COMMERCE IN SUPPLY CHAIN MANAGEMENT MODULE: SUPPLY CHAIN MANAGEMENT $3$ TOTAL MARKS: $70$ MARKS Guidelines $$ Students must answer the questions fully but concisely and as directly as possible, using sufficient research and application. All research should be referenced, using the Harvard referencing protocols. $$ The mark allocation is an indication of the weight and the length of the question. $$ The responses must be your own work. Plagiarism is a form of academic dishonesty and will not be tolerated. Format: $$ Ariel $111\mathrm{.}5$ spacing QUESTION ONE $[50]$ MR PRICE CASE Mr$.$ Price is a South African value fashion retailer, selling mainly own$-$brand products. The company is one of the nation$$s largest clothing retailers and is made up of an apparel division and a home division. The apparel division contributes $72\%$ of group sales and $83\%$ of profits. Mr$.$ Price is characterised by high$-$volume, low$-$cost sales and is predominantly a cash$-$based retailer with around $18\mathrm{.}8\%$ of sales on credit. This is a relatively low credit offering in comparison to its clothing peers. The first Mr$.$ Price store opened in $1987.$ As of the first half of $2012,$ the company owns $944$ stores, of which $67$ are situated beyond South Africa$$s borders, throughout Africa. The clothing company targets consumers that lie in the $4-10$ living standards measure $($LSM$)$ categories, between the ages $16$ and $24.$ However, a large proportion of Mr$.$ Price$$s apparel sales come from older age groups. In the last five years, Mr$.$ Price has achieved an average sales growth of around $16\%$ per annum and annual profit growth of around $21\%$ per annum. The expansion of Mr$.$ Price$$s operating margin has largely been attributable to the firm embarking on a highly successful supply chain project named Project Redgold. The project aims to streamline and achieve efficiencies from merchandising planning and procurement through the supply chain pipeline to in$-$store delivery. Project Redgold will continue indefinitely to continually monitor and create efficiencies within the supply chain. In addition to this, after an aggressive roll$-$out of its home stores, Mr$.$ Price has been removing unproductive space from its store portfolio, thereby further enhancing its operating margin. The company$$s relatively low credit offering allows it to provide an attractive dividend cover of $1\mathrm{.}6$ times, due to a lower need to fund its debtors compared to its peers. Mr$.$ Price has demonstrated more defensive characteristics in tougher consumer periods because of its predominantly cash offering. The fact that it benefits from consumer trade of low$-$cost products when its purse strings are tightened also helps the company thrive in hard economic times.