It customized its supply chain software to analyze

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: The tea company mixes a variety of basic teas from different vendors to make its own tea blends. It customized its supply chain software to analyze the worldwide availability and cost of the basic teas. Then the program factors in Lipton’s current inventory of the teas and determines the optimal blending option. In just the first year of its use, supply chain software saved Lipton $3 million. Sources: Brian Milligan, “Supply Chain Software Moves to the Web,” Purchasing (April 6, 2000), downloaded from www. findarticles.com; Alexei Oreskovic, “Never Break the Chain,” The Industry Standard (July 2, 2001), downloaded from www. findarticles.com; and “Yahoo Market Guide—Dell Computer Corporation,” Yahoo! Finance, downloaded from biz.yahoo. com/p/d/dell.html. sonal peaks occur. The conservative strategy avoids these risks through the locked-in interest rate and long-term financing, but it is more costly because of the negative spread between the earnings rate on surplus funds (5% in the example) and the cost of the long-term funds that create the surplus (8% in the example). Where the firm operates, between the extremes of the aggressive and conservative se...
View Full Document

Ask a homework question - tutors are online