A) Supply Chain Management (5 marks)
1- Suppose the company is located in Quebec, Canada and they would like to globalize by selling furniture in Europe and have some components produced in Asia. Explain 5 risks they may face and how they can mitigate against these risks.
2- Imagine that the company sold 100M USD of products in 2015 and their product costs were 30% of revenue. Their average inventory of raw material was 500K USD, WIP was 1M USD, and final product was 2M USD. The value of all assets is 20M USD. Calculate their inventory turns, percentage of assets as inventory, and weeks of supply.
B) Inventory Management (5 marks)
Suppose that company must order an average of 500 batches of wood. It cost 150 USD to place an order and monthly inventory cost is 5 USD. Suppose there are 300 working days per year.
1- Determine the EOQ and the yearly total cost.
2- What would be the impact if the company is considering a JIT ordering policy where they would order every two days.
C) Aggregate Planning (5 marks)
If the company does experience seasonal demand during the year, propose an aggregate planning strategy that would be most appropriate. Justify your answer.