Your Chief Supply Chain Officer (CSCO) is requesting a review of supplier-to-customer processes as related to recent growth in our company and increasing demand for faster responsiveness to customers. One alternative is to decentralize our inventory into regional Distribution Centers; however, our ERP system is currently limited in the data available to make some of these decisions ? and the output reports are very antiquated. Starting off the process, the CSCO directed that your Analysis Team use population data to pro-rate our national sales data as a starting point. For this analysis, you are asked to focus only on the flagship product. Voice Assistant IoT Add-on Box, 4GB, SKU #123-456789. The challenge is now yours to complete some computations and interpret the results!

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Storage cost Risk cost Average Inventory Taxes Obsolescence Damage Pilferage Relocation Warehouse (rent) Operations (labor) Operations (utilities) Operations (equipment) $ $4,500,000 $ is Total Annual Inventory Holding Costs ($) Inventory Holding Cost Rate (% annually) ԱԴ ԱԴ ԱԴ ԱԴ $ $ es is es is $ $ $ 225,000 CFO 144,000 CSCO 166,400 COO 16,000 CFO 12,000 COO 12,987 CSCO 8,234 CSCO 865 CSCO 2,432 CSCO Legend: CFO = Chief Finacial Officer COO = Chief Operating Officer CSCO = Chief Supply Chain Officer Storage cost Risk cost Average Inventory Taxes Obsolescence Damage Pilferage Relocation Warehouse (rent) Operations (labor) Operations (utilities) Operations (equipment) $ $4,500,000 $ is Total Annual Inventory Holding Costs ($) Inventory Holding Cost Rate (% annually) ԱԴ ԱԴ ԱԴ ԱԴ $ $ es is es is $ $ $ 225,000 CFO 144,000 CSCO 166,400 COO 16,000 CFO 12,000 COO 12,987 CSCO 8,234 CSCO 865 CSCO 2,432 CSCO Legend: CFO = Chief Finacial Officer COO = Chief Operating Officer CSCO = Chief Supply Chain Officer