QSO 322 Final Project Guidelines and Rubric

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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.

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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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Running Head: LOGISTIC ANALYSIS: ACME BICYCLE CASE STUDY

Logistic Analysis: ACME Bicycle Case Study
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1

LOGISTIC ANALYSIS: ACME BICYCLE CASE STUDY 2
I. Needs and Scenario Assessment
A. Assess customer logistics support needs for a product line.
1. Scenario Background:
The logistic support needs for an external customer will depend on their own production
requirements, material requirement, cost and time of production. The key elements essential for
ascertaining the logistic support requirement of the organization include the delivery duration
where the organizations would be forced to minimize the duration of supplying the two
customers (Feng & Kiely, 2018). Thus, the company should take the shortest time possible to
deliver the supplies to the two customers to increase utility.
2. Sourcing Alternatives:
From the required logistic support, it is evident that the costs associated with the in-house
and outsourced production bicycles for the demand cycle are $230. Form this cost, the best
package solution in regard to the in-house capabilities and outsourced alternatives is routing
(Sze, Sek, Chiew & Tiong, 2017). Implementing alternative routing package would allow the
organization to use the least cost, where the organization would be required to identify better
routing options to save on cost and time. Tracking is also an element for the logistic support that
would force the organization to keep its supplies on constant monitoring to increase quality
control.
3. Post-Sale Support/Reverse Logistics Needs:
From the case scenario provided, the estimated warranty costs for An ACME Bicycle
product is 2 years. This warranty cost means that the organization will spend extra finances in
replacing and repairing faulty and defective bicycles on a frequent basis. Therefore, there is a
need for the company to implement post-sale support and reverse the logistic need for the

LOGISTIC ANALYSIS: ACME BICYCLE CASE STUDY 3
customers such as minimization of damage to the supplies. Consequently, the organization will
need to minimize the damage on supplies so that they reach the customers in good condition
(Fanti, Iac...


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