SCM 450
A C D E G H Trans.
Question Get Answer

RR On-line (RR) is a successful outdoor equipment retailer that has

experienced increased logistics costs due to its move towards omni-channel distribution.

Screen Shot 2020-06-25 at 14.21.36.png
A
C
D
E
G
H
Trans. Cost
When 10%/Inv
1 internet rotalors
Symbol
Baca
SK
improve d'a
2 (In millions]
reduction
reduction
Sales
74-457
Cost of Goods Sold
475-16
Gross Margin
GM-5-065
5
Transportation
TC
FA35
7 Warehousing
WC
3585
Inventory Carrying
C-INKW
4713
9 Other Operating Cost
OOO
6208
10 Total Operating Cost
TOC
Earnings before interest
and boxes
OBIT
745
12 Interest
INT
239
13 Taxes
TX
161
372
450
390
14 Netincome
345
15
16 Asset Deployment
17 Cash
CA
BEES
18 Accounts Receivable
AR
4767
19 Inventory
IN
7411
20 Total Current Assets
70836
21 Fixed Assets
FA
10049
22 Total Assets
TA
31785
Liabilities
24 Current liabilities
a
183-18
5 Long term debt
LTD
3191
26 Total Liabilities
22039
27 Stockholder's Equity
SE
9746
20 Total Liabilities & Equity TL
31785
29 Ratio Analysis
30 Profit Margin
1 Return on Assets
N/TA
109%%
12 Inventory Tums/year
CGS/IN
4.42
Transportation as % of
TC/3
"Warehousing as % of
11 50%
Inventory carrying as %
ofales
IC/S
37 Assume that the tax amount is provided by the tax dept.
Screen Shot 2020-06-25 at 14.24.23.png
lnstuctions: USE THE FAR LEFT COLUMN A5 BASE CASE" MAKE ALL CHANGES FROM THERE
Remember to consider BOTH the balance sheet impact and the Income statement Start each with the "base case. First: calculate the impact of a 8% decrease in transport.
and then 10% decrease in warehousing AND simultaneously a 5% decrease in inventory.
Last column, Impact of service failure improvement: 3— I Simultaneously do the following; Increase net sales by 2% [fewer returns} Increase EGGS by 2% [fewer returns] Increase inventory by 1% {higher inv. to fill order} Fill out the blank in Excel and answer following questions 1 . Help Katie present the profit-leverage effect concept to HR management. How should she explain it to
them so that they can truly understand the equivalent sales impact of logistics? 2. Use the Strategic Profit Model to calculate the balance sheet, income statement and key ratio effects
for each of the scenarios. Develop a recommendation for Katie to present to top management, including
the aspects of the 5PM she should present, and why. 3. 1Il‘lihat potential goal conflicts would your recommendation create among merchandising, logistics, and
stores? 4. Identify two common metrics that merchandising, logistics, and the store could share that might reduce
existing conflicts. How would these metrics reduce conflict?

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