NOTICE: HOVER OVER CELLS WITH RED INDICATOR SYMBOLS IN UPPER RIGHT CORNER TO READ IMPORTANT COMMENTS
Production Costs
Bicycle
types
Scorpion
Princess Lea
Robo-Bike
Current Sales Year
Raw
Materials - Raw
Raw
metals - Materials Materials - Oursource Compone
Metals
d
nts
$25
$29
$30
$18
$22
Selling
Price
$95
Dec
750
Jan
250
Feb
300
825
875
275
300
320
325
$20
$24
$20
$28
$88
$120
Production Capacity per day
Dec
Jan
Feb
Mar
Metal Shop
900
300
350
325
Components
Final
Assembly
900
300
350
325
900
300
350
325
Cost to
order
Carrying
cost (% of
Unit cost)
$12
0.15
Shipping
Costs
Shipping
cost/per
Distributors bicycle
Omaha
$25
Denver
$35
Parts
Ordering
Part
Reorder
time from
Avg
supplier/d
Use/day
ays
Unit cost ROP FOR BRAKE PADS
EOQ FOR BRAKE PADS
Brake
pads(takes 4
pads per
bicycle)
Avg. pads
per year
0
5
0
$1.25
0
0
EXAMPLE FORMULA FOR ECONOMIC ORD
Where Annual carrying cost =
Component
s Sets Data
Estm.
Annual
Demand
Set-up costs
for
component
sets
Annual
holding cost
per set
Production
days per
year
Productions
rate per day
EXAMPLE FORMULA FOR EPQ
13000
Anl
Demand
$22.00
Setup
100
Holding
cost
0.5
$3.00
250
300
Daily
Demand
Daily
Productio
n rate
EPQ
10000
60
80
4000
READ IMPORTANT COMMENTS
Sales Year
Projected Sales
0.07
Warranty
Rate
Estm.
Estm.
Annual
Annual
Sales Sales - this projected
year
sales
Mar
275
Dec
803
Jan
268
Feb
321
Mar
294
0.03
300
315
883
936
294
321
342
348
321
337
0.01
0.02
0
Warranty Liability
EOQ FOR BRAKE PADS
0
ORMULA FOR ECONOMIC ORDER QUANTITY
Where Annual carrying cost = the Carrying costs % * unit cost
FORMULA FOR EPQ
=SQRT(((2*10000*100))/(0.5*(1-60/80)))
QSO 322 Acme Bicycle Case Study
The purpose of this case study is to apply a number of the key concepts covered in the course textbook
to a notional business case. Consider yourself the supply chain manager (SCM) for this company. In this
position, you work closely with the plant production manager to support the production schedule. The
production schedule is updated every quarter based on the latest sales estimates from the marketing
department. You also work with the purchasing department regularly for reorder of raw materials from
various suppliers. Another one of your key responsibilities is that you manage the warehouse, so you are
responsible for the efficient use of the limited warehouse space that you do have. You must maintain
sufficient inventory to ensure that there are no work stoppages because of stock outages. As the SCM,
you are also responsible for outbound transportation and finding economical means to ship finished
goods in a timely manner. In view of your wide range of responsibilities as the SCM, you play a vital role
in the profitability of your company.
Company background: Acme Bicycle Company is a medium-size bicycle manufacturer located in Wichita,
KS. It specializes in “theme” bicycles for children and teenagers. The themes include princesses from
fairytales and animals, which are popular with girls, and aliens, robots, and sports heroes, which are
popular with boys. As such, Acme Co. routinely produces its bicycles in small batch sizes to follow the
latest popular trends with its children and teenager customer base. This also ensures that the company
will not be left with unsold bicycles that are out of style with its customer base. The following is a
summary of Acme Co.:
Product lines: At any one time, Acme Co. is likely to be in the process of producing three different types
of bicycles based on market demand projections and current finished goods inventory levels.
Additionally, the profit levels of each of the bicycles vary, and at times, the production of higher-profit
bicycles takes precedence over lower-profit bicycles based on production and material capacities and
production constraints of the labor force and production machinery. Specific information on production
and transportation costs and the sales price of the bicycle product line are given in the case study data
sheet. For purposes of this case, unit profit for each bicycle is calculated by subtracting the production
and transportation costs from the sales price.
Production line: To construct a bicycle, the Acme Co. production line has consolidated and streamlined
its production process so that bicycle building can be accomplished in three segments on the production
line. These segments are the Metal Shop for initial molding and shaping of the metal parts, the
Components shop for the building of component sets, which include the seats, tires, and accessories for
each unique bicycle, and the Final Assembly shop for the assembly of all the components together, the
final inspection, and testing. Due to the nature of the work in the three production segments, each
segment has a different capacity level of how many bicycles it can produce in a normal workday. Acme’s
normal production is 40 production hours a week to cover production requirements for most of the
year. Production occurs Monday through Friday, and the work hours of the production crew are
designed such that some workers come in early to start up the assembly line and some workers come in
later to close down the assembly line. Lunch breaks are staggered such that some work is being done
throughout the entire 8-hour production shift. However, during peak demand periods, such as the
Christmas season, Acme Co. can begin overtime production for up to 12 hours per day for limited
periods. Naturally, this overtime will result in higher labor costs, which will decrease profit, so overtime
is used only sparingly.
Components Workshop: For each bicycle, the Components Workshop must build a components set for
each of the different types of bicycles produced in the assembly line. Production must ensure that there
are sufficient component sets built to support production, so part of the SCM’s job is to ensure that the
Components Workshop production is adequate throughout the production cycle.
Inventory Management: In order to minimize overall cost of inventory, Acme Co. practices just-in-time
inventory on the production line to the greatest extent possible. However, there is a requirement for a
warehouse at the production location to ensure a continuation of operations in the event of production
variation. This warehouse space is limited in capacity in order to minimize the carrying costs of inventory
and help prevent the possibility of having obsolete stock. Acme Co. orders its parts using the economic
order quantity called for by the purchasing department.
Suppliers: Acme has been in business for over a decade and now has established purchasing
relationships with several key suppliers of the raw materials such as metal, rubber, plastics, and so on.
Since Acme’s production levels vary greatly throughout the year, its ordering levels vary greatly as well.
Distributors: Acme does not retail its bicycles directly to the public but ships to two different
wholesalers that have distribution centers in the geographic region. One is located in Denver, CO, and
the other is in Omaha, NE. The shipping costs for each of these wholesalers’ locations differ, and this
amount affects the profitability of the final sale. It is important to consider the shipping costs, as this
greatly affects profitability, and the plant accountant is concerned about the rising costs of shipping.
Data for calculating shipping costs is given in the case study data sheet. The SCM must provide accurate
estimates of shipping costs to the plant accountant to ensure sufficient cash flow to cover operating
expenses.
Product support: Acme Co. prides itself on having a very durable product, and each bicycle comes with a
limited warranty for 1 year from date of purchase. In order to support this warranty policy, Acme Co.
maintains a set-aside amount of capital to honor warranty claims by way of a warranty liability account.
This set-aside is based on the historical failure rates and the sales within the warranty period. The plant
accountant must ensure that the right amount of money is available in the warranty liability account. If
the amount is too small, Acme Co. will not be able to honor its warranty commitments to its customers.
However, since the warranty liability account must be kept in a very liquid form in order to cover the
variances of honoring warranties, this amount accrues very little interest and could make much greater
interest for the company if the money were used for other purposes. Data needed for calculating the
amount of the warranty liability is given in the case study data sheet. The amount of the liability is based
on the production costs for the estimated percentage of warranty claims, for each type of bicycle, plus
the average transportation costs of the two distributors, for that same number of bicycles.
Case Analysis Scenario and Questions
You are an SCM for Acme Co., and the plant director wants to ensure that there will be sufficient logistic
support for the anticipated production schedule. A key question for the plant director is “Will I be able
to meet the production requirement of the anticipated market demand given my capacity?” The plant
accountant is also concerned about profit given the rising cost of materials and shipping costs. Some of
the key questions on the plant accountant’s mind are “What will this production run cost so that I can
ensure that we have adequate cash flows?” and “What will our profit be given our product mix and
shipping costs?” Use the accompanying case study data sheet for the underlying data. In order to
answer their concerns, answer the following questions:
1. Senior management feels that the company can expand further in the market but that its sales
force needs to focus on more than just taking orders from the customers. The customer service
representatives must understand the bigger picture of the service outputs that their firm
provides for their customers. Identify the four key service outputs associated with the supply
chain, and describe them in relation to this company.
2. As the supply chain manager, your task is to integrate the many functions within the field of
logistics into a cohesive, effective, and efficient operation. However, in order to do this, you
must keep in mind the objectives of logistics integration in the first place. Identify and describe
the six key objectives of logistics integration.
3. The accountant was going over last fiscal year's sales to calculate profit and is interested in
December through March. In February and March, backorder spare parts necessitated that the
metals were outsourced. What was the pre-shipping profit for those months?
4. Calculate the projected transportation costs for the firm for next year. Assume that the products
were shipped in equal amounts to the two distributors. Assume also that the average sales for
the four months given will be the average for the entire year.
5. All sales that are covered under a warranty require the firm to keep a certain level of cash for
warranty liability or reserves. This is based on the sales and percentage of the products
estimated to fail. What is the warranty liability for all the bicycles estimated to be sold during
next December?
6. The marketing director stated that the distributor in Colorado got a call for 150 Scorpion bicycles
last month. There were 30 Scorpions in transit. They had 110 on the shelf to sell. What was the
fill rate for that item at that location?
7. A logistics manager must consider various factors before deciding on what mode of
transportation to use. What are the five factors to consider before making this decision?
8. Senior management is considering building a new warehouse, but they are not familiar with the
various means to design a warehouse for basic handling considerations. Define and describe the
four basic designs for package handling for senior management.
9. You notice that the inventory of metals is being consumed more rapidly than planned. If you run
short of the metal stock, you can order your metals from your outsource supplier. For which of
the three bicycle types would you outsource the metals as a last resort and why?
10. Due to a snowstorm in the region, incoming supplies are in danger of exhausting the current
inventory. If supplies got low, which product would you first cut production on so as to conserve
your inventory? What would be your last product to cut? How would you make that decision?
11. You just received the production plan for December through March, based on the sales
projections. Do you see any problems with this production schedule? Assume that the current
inventory will be exhausted by the end of the month.
12. One of the key indicators of success in inventory management is inventory turn. Calculate the
inventory turn for the front safety reflectors (each bike has one). The average annual sales have
been 5,500, and the average inventory level for the reflectors has been 500.
13. Stockouts are a serious concern for all inventory managers. In order to prevent stockouts, each
item in the inventory has a reorder point. Calculate the reorder point for the brake pads.
14. There is a cost to the ordering process, and determining the quantity to order each time
requires that several factors are taken into consideration. Determine the EOQ for the brake
pads.
15. Selecting a proper order selection method is an essential first step for a warehouse manager. If
Acme Co. wanted to ensure it segregated its finished goods inventory for its specific customers,
what order selection technique should it use?
16. The Components Workshop is reconsidering its batch sizing. It wants to estimate the best lot
size for the upcoming production year. The estimate for the annual demand will be based on 9
times the average of the 4 months of the Projected Sales in the Data Sheet, due to the
exceptionally high demand in December. What is EPQ for the upcoming year's production run?
(Use the video Production Planning: EPQ Example to assist you with completing this problem).
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
CASE QUESTIONS
Senior management feels that the company can expand further in the market but that its sales force needs
to focus on more than just taking orders from the customers. The customer service representatives must
understand the bigger picture of the service outputs that their firm provides for their customers. Identify the
four key service outputs associated with the supply chain, and describe them in relation to this company.
As the supply chain manager, your task is to integrate the many functions within the field of logistics into a
cohesive, effective, and efficient operation. However, in order to do this, you must keep in mind the
objectives of logistics integration in the first place. Identify and describe the six key objectives of logistics
integration.
The accountant was going over last fiscal year's sales to calculate profit and is interested in December
through March. In February and March, backorder spare parts necessitated that the metals were outsourced.
What was the pre-shipping profit for those months?
Calculate the projected transportation costs for the firm for next year. Assume that the products were
shipped in equal amounts to the two distributors. Assume also that the average sales for the four months
given will be the average for the entire year.
All sales that are covered under a warranty require the firm to keep a certain level of cash for warranty
liability or reserves. This is based on the sales and percentage of the products estimated to fail. What is the
warranty liability for all the bicycles estimated to be sold during next December?
The marketing director stated that the distributor in Colorado got a call for 150 Scorpion bicycles last month.
There were 30 Scorpions in transit. They had 110 on the shelf to sell. What was the fill rate for that item at
that location?
A logistics manager must consider various factors before deciding on what mode of transportation to use.
What are the five factors to consider before making this decision?
Senior management is considering building a new warehouse, but they are not familiar with the various
means to design a warehouse for basic handling considerations. Define and describe the four basic designs
for package handling for senior management.
You notice that the inventory of metals is being consumed more rapidly than planned. If you run short of the
metal stock, you can order your metals from your outsource supplier. For which of the three bicycle types
would you outsource the metals as a last resort and why?
Due to a snowstorm in the region, incoming supplies are in danger of exhausting the current inventory. If
supplies got low, which product would you first cut production on so as to conserve your inventory? What
would be your last product to cut? How would you make that decision?
You just received the production plan for December through March, based on the sales projections. Do you
see any problems with this production schedule? Assume that the current inventory will be exhausted by the
end of the month.
One of the key indicators of success in inventory management is inventory turn. Calculate the inventory turn
for the front safety reflectors (each bike has one). The average annual sales have been 5,500, and the
average inventory level for the reflectors has been 500.
Stockouts are a serious concern for all inventory managers. In order to prevent stockouts, each item in the
inventory has a reorder point. Calculate the reorder point for the brake pads.
There is a cost to the ordering process, and determining the quantity to order each time requires that several
factors are taken into consideration. Determine the EOQ for the brake pads.
Selecting a proper order selection method is an essential first step for a warehouse manager. If Acme Co.
wanted to ensure it segregated its finished goods inventory for its specific customers, what order selection
technique should it use?
The Components Workshop is reconsidering its batch sizing. It wants to estimate the best lot size for the
upcoming production year. The estimate for the annual demand will be based on 9 times the average of the
4 months of the Projected Sales in the Data Sheet, due to the exceptionally high demand in December. What
is EPQ for the upcoming year's production run? (Use the video Production Planning: EPQ Example to assist
you with completing this problem).
Chap
Week
Critical
Element
3
1
IA1
2
2
IA1
8
2
IA2
8
2
I B 2, II C 3
13
1
IA3
3
1
II B 3
8
2
II C 3
10
6
II C 4
4
3
II A 2
5
4
II A 3
5
4
I B 1, I B 3
7
6
II B 2, II C 2
7
6
II B 4
7
6
II B 1
9
6
II C 1
5
5
II A 1
QSO 322 Final Project Guidelines and Rubric
Overview
A detailed foundational knowledge of logistics management is essential to a successful logistics career. Companies want employees to be able to assess existing
processes and practices, but also to improve these processes to cut costs and meet deadlines. Your assessment for this course is a report or presentation with
detailed speaker notes or a recording using a tool such as Jing, detailing your analysis and including foundational recommendations for an existing company’s
logistics framework. This report will focus on one organization and will be broken up into several sections to give attention to the key areas of logistics
management. Throughout this course, you will have the opportunity to receive feedback from your instructor to help you achieve a successful final submission of
your evaluation report.
The project is supported by a milestone, consisting of 16 questions directly related to each critical element of your final case study submission. This milestone
will be submitted in Module Five. The final submission will occur in Module Seven.
In this assignment you will demonstrate your mastery of the following course outcomes:
•
•
•
•
•
Calculate costs and production needs based on analysis of organizational logistic needs assessments and customer requirements
Identify company logistics, capacity planning, and resource needs by applying foundational qualitative and quantitative analysis methods
Propose foundational methods for integrating logistic delivery systems into a cohesive, lean delivery system to satisfy customer demand at least cost
Analyze variable demand cycles, carrying costs, customer preferences, and just-in-time principles for successful inventory management
Evaluate the efficiency and effectiveness of physical distribution systems for receiving, storing, and shipping raw goods and finished products
Prompt
Your needs assessment and improvement proposal should answer the following prompt: Given the organization, products, and specifications provided in the
Acme Bicycle case study, what are the logistics needs and what suggestions can you make for improving aspects of the framework?
Specifically, the following critical elements must be addressed:
I.
II.
Needs and Scenario Assessment
A. Assess customer logistics support needs for a product line.
1. Scenario Background: Analyze the logistic support needs of an external customer given their own production requirements and
considering time, cost, and quantity of materials needed. What are the key elements, such as product requirements, provided in the
scenario that are essential for determining the logistic support needs of the organization? What are the needs of the organization?
2. Sourcing Alternatives: Given required logistic support, calculate the costs for in-house and outsourced production of goods for the
demand cycle. What would be a best package solution that considers in-house capabilities and outsourced alternatives that would allow
for least cost, given your results?
3. Post-Sale Support/Reverse Logistics Needs: Calculate the estimated warranty costs for a product and explain what the costs mean for
the company. Something to consider in the explanation is support needed to customers post-sale to plan post-sale support,
replacement, and discontinuation of products. For these, you will need to estimate the failure rates from the scenario.
B. Assess company capacity and approaches in order to satisfy needs.
1. Capacity Constraints: Given customer requirements and sourcing mix, identify specific capacity constraints in production. You will need
to figure out the known capacity in view of project demand to do this successfully.
2. Product Positioning: Develop a plan for positioning finished goods to ensure ease of delivery and convenience, while also attending to
resource needs and capacity constraints.
3. Materials Requirements Planning: Given the required rate of production and plant capacity, create a material requirements plan to
successfully fulfill customer and logistics needs identified in the scenario and during your analysis of the case. Your plan should be
simple, focusing only on the needs identified and your plan to ensure you are meeting material requirements.
Optimization Proposal
A. Recognize and apply logistics management techniques given internal capabilities.
1. Production Plan Creation: Given the set of production requirements for one item, determine optimal batch size (the best size or number
of products per batch that you will create in a given set to meet production requirements) for a product considering the set-up time and
calculated demand patterns.
2. Production and Stockage Alternatives: Considering the required output for the product line, develop a single solution or mix of maketo-stock, make-to-order, or make-to-engineer methods to fulfill projected demand.
3. Profit Potential: Given the set of costs and selling prices, determine and explain the optimal mix of two products a company could
produce given the capacity constraints you identified previously.
B. Manage sourcing and inventory to minimize costs.
1. Inventory Levels: Determine inventory levels of three products to minimize costs while considering the production schedule and
projected sales. In other words, what would be the best number of each product to have on hand to meet projected sales while not
wasting money on extra storage of unsold goods?
2. Inventory Management Evaluation: Discuss the effectiveness and efficiency of the inventory management process, considering key
metrics such as inventory turn rate, stock outages, and carrying costs for three products.
3. Planning for Inventories: Based on historic and projected data, determine the likely inventory position for three products that balances
the need to minimize costs with avoiding stock outages. In other words, calculate and explain the significance of not-in-stock rates for
three products, based on product and demand schedules.
4. Just-in-Time (JIT) Inventory: For the given inventory consumption patterns, determine an opportunity to use JIT inventory techniques to
reduce warehouse needs while not starving production capacity. In other words, calculate JIT inventory needs for a segment of a
production line for a single day.
C. Manage a physical distribution system to minimize costs.
1. Physical Distribution Process: Based on the inventory requirements, develop a physical distribution process for the company that is
focused on necessary square footage of warehouse space for given inventory levels.
2. Warehousing Effectiveness: Given the set of required inventory, evaluate the effectiveness of the warehouse operations using key
metrics (that you will choose). Be sure to consider the following in your calculations of key metrics: receipt of raw goods, stowing,
shipping, and warehouse relocation.
3. Shipping Management to Minimize Costs: Develop a plan to deliver finished goods to customers within given shipping requirements for
three products while minimizing costs.
4. Warehousing Utilization: For the required inventory, determine the effectiveness of warehouse utilization for the inventory. Your
evaluation of warehouse utilizations should include calculating space utilization rates for commodities.
Milestones
Milestone: Acme Bicycle Case Study Questions
In Module Five, you will submit answers to 16 questions related to the Acme Bicycle case study. Answering the 16 questions will assist you in completing your
final project case study, due in Module Seven. Answer the questions as completely as possible to prepare yourself for the final case study. Each question
identifies the critical element of the final project to which it is related. Review the case study questions, and review their alignment with the corresponding
critical elements of the final case study: Case Study Questions Alignment.
Final Project Submission: Acme Bicycle Case Study
In Module Seven, you will submit a report or a presentation with detailed speaker notes or a recording using a tool such as Jing. This report or presentation will
detail your analysis and will include foundational calculations and suggestions for optimizing an existing company’s logistics framework. It should be a complete,
polished artifact containing all of the critical elements of the final product. It should reflect the incorporation of feedback gained throughout the course. The final
project will be graded using the Final Product Rubric (below).
Final Product Rubric
Guidelines for Submission: You will have two options for submission of your final project: You may create a presentation with detailed speaker notes and
appropriately cited resources, or you may create a report in APA format. Regardless of your choice, your submission should be of professional quality and clear,
without spelling, grammar, or citation errors. You must also show all calculations in an appendix section of your report or an appendix slide(s) of your
presentation.
Critical Elements
Exemplary (100%)
Assessment: Scenario Meets “Proficient” criteria, and
Background
depth and detail of analysis show
insight into the logistics support
beyond foundational
considerations
Assessment: Sourcing Meets “Proficient” criteria, and
Alternatives
comparison identifies least-cost
combination while still meeting
customer demand
Assessment: PostSale Support
Meets “Proficient” criteria, and
explanation is a comprehensive
overview of the key elements of
post-sale support costs and
needs
Proficient (85%)
Analyzes the logistic support
needs of the scenario external
customer, considering production
requirements, time, cost, and
quantity of materials needed
Needs Improvement (55%)
Analyzes the logistics support
needs of the scenario external
customer, but not in
consideration of given
requirements or with gaps in
necessary detail
Correctly calculates costs for in- Calculates costs for in-house and
house and outsourced
outsourced production, but
production of goods for demand incorrectly or in a manner that
cycle for comparison for least
would not allow for comparison
cost
for least cost
Accurately calculates estimated
Calculates estimated warranty
warranty costs given failure rates costs for a product, but
for a product and explains what estimation is inaccurate, or does
the costs mean for the company not explain what the costs mean
for the company
Not Evident (0%)
Does not analyze the logistics
support needs of the scenario
external customer
Value
5.7
Does not calculate costs for inhouse and outsourced
production of goods for
comparison
5.7
Does not calculate estimated
warranty costs for a product
5.7
Assessment: Capacity Meets “Proficient” criteria, and
Constraints
identification is qualified with
explanation of the specific
deficiencies in production
Identifies production capacity
constraints by calculating known
capacity in view of projected
demand correctly
Identifies production capacity
constraints by calculating known
capacity, but determination or
calculations are incorrect or
incomplete
Assessment: Product Meets “Proficient” criteria, and
Drafts a logical plan to minimize Drafts a plan to minimize costs of
Positioning
plan identifies the improvement costs of transporting raw goods
transporting raw goods and
opportunities for product
and delivery of finished goods
delivery of finished goods
positioning accurately to make a between two plant sites and
between two plant sites and
feasible plan
three customer sites based on
three customer sites, but plan is
correct calculation of costs
not logical, or the calculations on
which it is based are not correct
Assessment:
Meets “Proficient” criteria, and
Creates a simple material
Creates a simple material
Materials
materials plan is accurate in
requirements plan based on
requirements plan, but does not
Requirements
identifying or preventing risks to correct calculations of projected base it on calculations, or
successfully fulfilling
raw goods requirements for
calculations were performed
requirements
production
incorrectly
Proposal: Production Meets “Proficient” criteria, and
Creates production plan that
Attempts to create production
Plan Creation
plan is detailed to the level of
determines optimal batch size for plan, but it is not based on set-up
identifying shortcomings in
one product considering the set- time, production requirements,
capacity compared to the
up time, production
and calculated demand patterns
demand cycle
requirements, and calculated
demand patterns
Proposal: Production Meets “Proficient” criteria, and
Develops a single solution or mix Develops a single solution or mix
and Stockage
solution is of a quality to take
solution that would logically fill
solution, but solution would not
Alternatives
production constraints into
project demand based on
logically fill project demand or is
consideration to develop the
required output for the
not based on required output for
solution that is most appropriate production line
the production line
for the scenario
Proposal: Profit
Meets “Proficient” criteria, and
Determines and explains the
Determines and explains a mix of
Potential
explanation of mix clearly details optimal mix of two of the
two products, but it is not the
the mix and the parameters that products from the case, given
optimal mix or is not based on
make the mix optimal for the
analysis of costs and selling prices analysis of costs and selling price
case, so that explanation could
act as a recommendation for
company improvement
Does not identify production
capacity constraints by
calculating known capacity
5.7
Does not draft a plan to minimize
costs of transporting raw goods
and delivery of finished goods
between two plant sites and
three customer sites based on
calculation
5.7
Does not create a simple material
requirements plan
5.7
Does not create a production
plan
5.7
Does not develop a single or mix
solution for filling project
demand
5.7
Does not determine and explain a
mix of two products
5.7
Proposal Inventory
Levels
Proposal: Inventory
Management
Evaluation
Proposal: Planning
for Inventories
Proposal: Just-inTime Inventory
Meets “Proficient” criteria, and
inventory levels identified for the
three products are logically
balanced between production,
sales, and cost considerations
over time
Meets “Proficient” criteria, and
discussion considers specific and
relevant metrics that are
calculated from the information
provided in the scenario
Determines inventory levels for
three products that would
potentially minimize costs while
considering production schedule
and sales projections
Determines inventory levels for
three products, but levels would
not minimize cost or do not
consider production schedule
and sales projections
Does not determine inventory
levels for three products
5.7
Accurately discusses the
effectiveness and efficiency of
inventory management processes
for three products from the
scenario, considering key metrics
used in logistics management
Does not discuss the
effectiveness and efficiency of
inventory management processes
for three products from the
scenario
5.7
Meets “Proficient” criteria, and
explanation is qualified with a
larger-context discussion about
the risks and benefits of NIS rates
and total lost sales that may
occur
Meets “Proficient” criteria, and
calculation is of a quality to
account for risks and unexpected
changes
Accurately calculates and
explains not-in-stock (NIS) rates
based on given production and
demand schedules for three
products
Discusses the effectiveness and
efficiency of inventory
management processes for three
products from the scenario, but
with gaps in accuracy or lacking
consideration of key metrics used
in logistics management
Calculates and explains not-instock (NIS) rates, but not
accurately based on given
production and demand
schedules for three products
Does not calculate and explain
not-in-stock (NIS) rates for all
three products
5.7
Calculates JIT inventory needs for
a segment of the production line
for one day, but used incorrect
technique, provided incorrect
answer, or used incorrect
information from scenario
Develops a physical distribution
process that inaccurately details
necessary square footage of
required warehouse space for
given inventory levels, or process
lacks detail or focus
Evaluates the effectiveness of
warehouse operations, but is not
accurate, or does not use key
metrics successfully to determine
effectiveness
Does not calculate JIT inventory
needs for a segment of the
production line for one day
5.7
Does not develop a physical
distribution process that
identifies necessary square
footage
5.7
Does not evaluate the
effectiveness of warehouse
operations
5.7
Proposal: Physical Meets “Proficient” criteria, and
Distribution Process process creation is sophisticated
and includes allocation of space
based on the movement
quantities of materials
Proposal:
Warehousing
Effectiveness
Meets “Proficient” criteria, and
evaluation is detailed enough to
provide a foundation for future
recommendations for
improvement
Accurately calculates JIT
inventory needs for a segment of
the production line for one day,
based on provided information
Develops a focused physical
distribution process that
accurately details necessary
square footage of required
warehouse space for given
inventory levels
Accurately evaluates the
effectiveness of warehouse
operations by utilizing key
metrics
Proposal: Shipping
Management
Proposal:
Warehousing
Utilization
Articulation of
Response
Meets “Proficient” criteria, and
profiles accurately identify
lowest-cost shipping profiles for
customer demand
Develops a reasonable plan for
delivering finished goods to
customers that minimizes costs,
based on shipping requirements
provided
Meets “Proficient” criteria, and
Accurately determines the
evaluation is detailed enough to effectiveness of warehouse
provide the foundation for future utilization for the required
recommendations for
inventory provided
improvements
Submission is free of errors
Submission has no major errors
related to citations, grammar,
related to citations, grammar,
spelling, syntax, and organization spelling, syntax, or organization
and is presented in a professional
and easy-to-read format
Develops a plan for delivering
finished goods to customers that
minimizes costs, but it is not
reasonable based on shipping
requirements provided
Inaccurately determines the
effectiveness of warehouse
utilization for the required
inventory provided
Does not develop a plan for
delivering finished goods to
customers that minimizes costs
5.7
Does not determine the
effectiveness of warehouse
utilization
5.7
Submission has major errors
related to citations, grammar,
spelling, syntax, or organization
that negatively impact readability
and articulation of main ideas
Submission has critical errors
related to citations, grammar,
spelling, syntax, or organization
that prevent understanding of
ideas
Total
3.1
100%
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