Assignment 7 Week 7 Round 6 FC - 1 Assignment 7 Fresh Connections Simulation Round 6 The following is the analysis of the results of the Fresh

Assignment 7 Week 7 Round 6 FC - 1 Assignment 7 Fresh...

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Assignment 7: Fresh Connections Simulation – Round 6 The following is the analysis of the results of the Fresh Connections Simulation for the company Team 8. The analysis will include the businesses current performance based on adjustments made from round five. Using the performance indicators and detailed analysis provided in the simulation, Team 8 will hopefully be able to make the adjustments necessary to turn the company in the direction towards profitability. Reviewing the feedback, provided by the Fresh Connection, from the changes implemented at the end of round five, it has been revealed that Team 8 continues to have a problem with the orange supplier, the company is carrying excess inventory for product components, and the operations is struggling to achieve a balance in both the incoming and outgoing warehouse. Team 8’s adjustments created a situation of underutilized production capacity and have done nothing to rectify the obsolete inventory issue. Modifications are still required to see improvements in ROI. Service levels improved and Team 8 received bonuses this round versus penalties. Looking at Team 8 from a financial point of view it was shown that ROI went from -10.89% to -13.11% for an additional 2.22% loss. There was a $615K decrease in sales revenue. Team 8 had a significant shift from penalties to bonuses from round 5 to 6 receiving $388K in bonuses for a shift of $537K due to the supply chain over performing. Production costs rose by $200K, costs of goods went up resulting in a lower gross margin from the previous round. The overall operating profits for round 6 were higher than round 5 for a total operation cost of -$560K. Team 8 continues on the path of reviewing the business by the separate functional units (Purchasing, Operations, Sales, and the Supply Chain) and make changes accordingly while 1
trying to understand how those changes will affect each functional unit and the overall company performance. This round it was agreed to make minimal changes to purchasing and supply chain while focusing on the operation and sales as it is believed that the adjustments to be made in production and sales will greatly improve the overall performance of Team 8 and finally move in the direction of making a profit. Any and all changes were discussed and agreed to by the management of all functional units. The following sections break down the issues and how the issues were addressed for each Functional Unit. Purchasing The Receiving Department provided information that the supplier, Miami Oranges’ delivery reliability is still below par and the components for production may become unavailable.

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