供应链管理5-8供应链管理5

1、CHAPTER5Financial Impactof InventorySelected Financial Data for Manufacturers, Wholesalers, and Retailers for 1997 ($Millions)5-2Note: Ending inventory figures are used for inventory investment. All figures are for 1997.McGraw-Hill/IrwinCopyright 2001 by The McGraw-Hill Companies, Inc.All rights res

2、erved.CompaniesSalesNet ProfitsNet Profits as aTotal Assets Inventory InvestmentInventories as aPercent of SalesPercent of AssetsManufacturersAbbott Laboratories$11,883$2,09418%$12,061$1,28011% Borden, Inc.1,48822115%2,20630214%The Clorox Company2,74129811%3,0302127%Dresser Industries, Inc.7,4583184

3、%5,09997219%Ford Motor Company153,6276,9205%279,0975,4682%General Electric Company90,8408,2039%304,0125,8952%General Mills6,0334227%3,86138910%Goodyear Tire & Rubber Co.13,0655594%9,9171,83519%Harris Corp.3,9391333%3,78460416%Honeywell Co.8,0284716%6,4111,02816%NCR Corp.6,59870.11%5,2934899%Newell C

4、o.3,2342909%3,94462516%Pfizer, Inc.12,1882,21318%15,3361,77312%Sara Lee Corp.20,011(523)-3%10,9892,88226%Xerox Corp.18,1661,4528%27,7322,79210%Wholesalers and RetailersBaxter International6,1383005%8,7071,20814%Bergen Brunswig Corp.11,661821%2,7071,30948%Dayton Hudson Corp.27,7577513%14,1913,25123%F

5、leming Companies, Inc.15,372250.16%3,9241,01926%Kmart Corporation32,1832491%13,5586,36747%Nordstrom4,8521864%2,86582629%Sears, Roebuck & Company41,2961,1883%38,7005,04413%Supervalu Inc.17,2012311%4,0931,11627%Wal-Mart Stores, Inc.117,9583,5263%45,38416,49736%Winn-Dixie13,2192042%2,9211,24943%Cost Tr

6、ade-offs in Marketing and Logistics5-3McGraw-Hill/IrwinCopyright 2001 by The McGraw-Hill Companies, Inc.All rights reserved.MARKETINGOrder processing and information costsWarehousing costsLot quantity costsTransportation costsInventorycarrying costsPlace/customer service levelsPriceOrder processing

7、and information costsProductComponents of Inventory Carrying Costs5-4CapitalInventory service Storage space Inventory riskMcGraw-Hill/IrwinCopyright 2001 by The McGraw-Hill Companies, Inc.All rights reserved.Inventory Positions in the ManufacturersLogistics System5-5Assumptions: A one-time increase

8、(decrease) in finished goods inventory results in a one-time increase (decrease) in raw materials purchased.McGraw-Hill/IrwinCopyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved.Finished goods inventoryin fieldFinished goods inventoryat plantIn-process inventoryRaw materials invento

9、ryNormative Model of Inventory Carrying Cost Method5-6McGraw-Hill/IrwinCopyright 2001 by The McGraw-Hill Companies, Inc.All rights reserved.Relocation costsPilferageDamageInventory risk costsObsolescenceCompany-owned warehousesRented warehousesPublic warehousesStorage space costsPlant warehousesInve

10、ntory carrying costsTaxesInsuranceInventory service costsInventory investmentCapital costsAdjusting the Cost of Money to Fit the 5-7Method of Inventory ValuationOne MethodInventory at full costVariable cost is 80% of full cost Inventory at variable costCost of money before tax is 30% Cost of money a

11、ssociated with the inventory investmentAnother methodCost of money before tax Variable cost is 80% of full cost Inventory at full costAdjusted cost of moneyCost of money associated with the inventory investment$10,000,000 x 80%$8,000,000 x 30% $2,400,00030% 80%$10,000,000 x 24% $2,400,000McGraw-Hill

12、/IrwinCopyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved.Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved.Summary of Data Collection Procedure5-8McGraw-Hill/Irwin Douglas M. LambertStepNo Cost CategorySourceExplanationAmount (Current Study)1. Cost of MoneyComp

13、trollerThis represents the cost of having money investedin inventory and the return should be comparable to other investment opportunities.30% pretax2. Averagemonthly inventory valued at variable costs delivered to the distributioncenter1. Standard cost data - comptrollers department2. Freight rates

14、 and product specs are from distribution reports3. Average monthly inventory in casesfrom printout received from sales forecastingOnly want variable costs since fixed costs go on regardless of the amount of product manufactured and stored - follow steps outlined in body of report.$7,800,000 valued a

15、t variable cost delivered to the D.C. (Variable manufactured cost equaled 70% of full manufactured cost. Variable cost FOB the DC averaged 78% of full manufactured cost)3. TaxesThe comptrollers departmentPersonal property taxes paid on inventory$90,948 which equals 1.17%4. InsuranceThe comptrollers

16、departmentInsurance rate/$100 of inventory (at variable costs)$4,524 which equals 0.06%5. Recurring storage (public warehouse)Distribution operationsThis represents the portion of warehousing costs that are related to the volume of inventory stored.$226,654 annually which equals 2.89%6. Variable sto

17、rage (plant warehouses)Transportation servicesOnly those costs that are variable with the amount of inventory stored should be included.Nil7. ObsolescenceDistribution department reportsCost of holding product inventory beyond its useful life0.80% of inventory8. ShrinkageDistribution department repor

18、tsRequires managerial judgment to determine the portion attributable to inventory storage.$100,308 which equals 1.29%9. DamageDistribution department reportsRequires managerial judgment to determine the portion attributable to inventory storage.10. Relocation costsNot availableOnly relocation costs

19、incurred to avoid obsolescence should be included.Not available11. Total carrying costsCalculate the numbers generated in steps 3, 4, 5, 6, 8, 9 and 10 as a percentage of average inventory valued at variable cost delivered to the distribution center and add them to the cost of money (step 1).36.21%T

20、he Impact of Inventory Turns on Inventory Carrying Costs5-9InventoryTurns123456789101112131415AverageInventory$750,000 375,000250,000187,500150,000125,000107,14393,75083,33375,00068,18262,50057,69253,57150,000Carrying Costat 40 Percent$300,000 150,000100,00075,00060,00050,00042,85737,50033,33330,000

21、27,27325,00023,07721,42820,000Carrying CostSavings$150,000 50,00025,00015,00010,0007,1435,3574,1673,3332,7272,2731,9231,6491,428McGraw-Hill/IrwinCopyright 2001 by The McGraw-Hill Companies, Inc.All rights reserved.Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved.Relationship Bet

22、ween Inventory Turns5-10and Inventory Carrying CostsInventory carrying costs$300,000$275,000$250,000$225,000$200,000$175,000$150,000$125,000$100,000$75,000$50,000$37,500$25,0000123456789101112131415Inventory TurnsSource: Douglas M. Lambert, and Robert H. Quinn, “Profit Oriented Inventory Policies Re

23、quire a Documented Inventory Carrying Cost,” Business Quarterly 46, no. 3 (Autumn 1981), p.65.McGraw-Hill/IrwinAnnual Inventory Carrying Costs Compared to Inventory Turnovers5-11Inventory carrying costs (per unit)$30.0015.0012.5010.007.506.005.003.752.50012345678910111 2Inventory TurnsMcGraw-Hill/Ir

24、winCopyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved.Variable Manufacturing Cost$100 Carrying Cost % x 30% Annual Cost to Carry in Inventory $30 Monthly Cost (1/12)$2.50Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved.Inventory Positions and Major Flows in a Supply Chain5-12Orders Payments InformationProductOrder