Pre class assignment Ch 3 Metrics, Ch 4 Omnichannel, Master data
docx
keyboard_arrow_up
School
Baruch College, CUNY *
*We aren’t endorsed by this school
Course
3710
Subject
Industrial Engineering
Date
Feb 20, 2024
Type
docx
Pages
3
Uploaded by SuperMusicOryx14
Pre class assignment Metrics, master data and omnichannel distribution
Chapters 3, 4 and mini case study
Read Chapters 3 and 4, and “Cost of Poor Quality” article. Then answer the
questions below.
Chapter 3- Metrics and Drivers
1.
Would you expect a brick-and-mortar retailer or an online retailer to have a higher asset turnover? I expect an online retailer to have a higher asset turnover because they have lower overhead costs (less total assets) compared to a brick-and-mortar retailer. They do not have to deal with costs such as rent, staff, and utilities and thus revenue does not necessarily have to reach high amounts to turnover their assets.
2.
What is the formula for asset turnover? The formula is sales revenue divided by total assets.
3.
Look up WalMart and Amazon asset turnover. Show the values for each company and reference the source of the information. Which has a higher value? Does that change your answer to Question #1 above? Walmart’s quarterly asset turnover is listed as 0.63 for the most recently reported fiscal quarter, while Amazon had one of 0.28 (AlphaQuery). Walmart has a higher value, which changes my answer to the first question as I expected an online retailer to have a higher asset turnover.
4.
Which supply chain drivers (Inventory, transportation, sourcing, pricing, facilities, information) most impact their asset turnover?
One of the biggest differences may be due to inventory as Walmart follows a unique strategy in which suppliers maintain their own inventory levels rather than Walmart itself. Amazon has a vast network of fulfillment centers to be able to ship products quickly which means that there is a high capital investment involved in terms of assets. Transportation is another main driver that leads Amazon to have
a lower asset turnover, because of the wide distribution network and promises for fast delivery. The complexity of their network and values for rapid shipping can lead to higher transportation costs compared to Walmart.
Chapter 4- Network Distribution Design
In answering this question, use some or all of 7 factors that influence the structure of a supply chain distribution network (see textbook)
1.
Describe a product you would never buy online. Give three reasons why?
I would never buy a car online because 1) I would much rather see the car in person to make sure I am not getting scammed, 2) The cost of a car is too hefty for me to give to someone over the internet, and 3) There are features of cars that should be seen (and tested) in person before purchasing. 2.
For that product, what could make you change your mind and buy the product online?
In terms of product variety, if there are more options of cars that I could pick from online, I would put some more thought into buying it. Furthermore, if there is a car that I liked but is not available at a dealership near me, I would also think about buying it online (product availability).
3.
What is a product you always buy online? Give three reasons why?
I always buy laundry detergent online because 1) the response time is often very fast, and I can usually receive it in the mail the next day, 2) I prefer the online customer experience as laundry detergent is quite heavy and it will be delivered straight to my door step which reduces the amount of physical work I need to put into getting it, and 3) the product variety is greater online compared to in-store markets. 4.
For that product, what could make you switch to only buying that product at a store?
If shipping costs were to increase due to the weight of the detergent, I would prefer to either buy it in store or pick it up in person. Further, if there was a jumbo sized detergent that is only available in store, I would rather buy that instead of online. Metrics and master data case - mini case (Answer 4 questions at the end of the case) (Read the article “Cost of Poor Data Quality” before answering.)
Ace Autoparts is looking to analyze the accuracy and integrity of new inventory optimization software. Two vendors who sell inventory optimization software, Opti LLC and Uknow, Inc, have been given the same data from Ace Autoparts to analyze. Ace is aware that their master data is not perfect.
Opti, LLC is a startup company. Its founder has a PhD from MIT and has developed an AI solution to inventory optimization. The company is backed by venture capital and has a few customers in various industries.
Uknow, Inc, is a major software firm that has been around for many years. They have many customers in
many different industries. Inventory optimization technology is a new area they are expanding into. They are updating inventory optimization algorithms that have been around for the last few years. Ace Autoparts gave both firms historical data from the past year. The software firms were given 7 data elements: forecasts, forecast error, actual sales, inventory levels, product costs, lead times and supply variability data for a full year. Though Ace has thousands of auto parts, they only gave 10 parts to the two firms to keep the evaluation simpler. Opti and Uknow both presented their results. Not surprising, the two firms’ results were different. Opti, LLC reported that their optimization software could have saved Ace $1.2 million.
Uknow, Inc. reported that their optimization software could have saved Ace $2.9 million.
1.
For the 7 data elements supplied by Ace, which would likely be most accurate? Which would be least accurate? The most accurate would likely be actual sales, and product costs. Actual sales are recorded through real
transactions, so it may be less prone to errors. The least accurate may be forecasts and forecast errors.
Forecasts in general are mere predictions for the future which is inherently inaccurate to an extent. If the forecasts are inaccurate, the forecast errors will be inaccurate as well.
2.
What questions would you ask the two software firms regarding how they analyzed the input data? (Use the information in the article “Cost of Poor Data Quality” to support your answer.)
I would ask if there were any errors in the data as 10 to 25% of data record contain inaccuracies. If yes, then the next question would be how they dealt with the incorrect data, and if all incorrect data was treated the same way. I would also ask how they dealt with data that was inconsistent across sources and how the process of minimizing the impact that it would have went. 3.
What questions would you ask both software firms about their algorithms?
I would ask Opti how exactly their AI software works and if it was changed in any way to be catered specifically for Ace Autoparts or for the industry in general. I would ask Uknow how they are updating inventory optimization algorithms, and if their software can account for more of the auto parts despite only being given ten. For both firms, I would ask how each of their algorithms can deal with the incomplete data that Ace Autoparts struggles with dealing with. 4.
This mini case provides 5 ‘data points’ about the two companies: history, technology, customers, company size and results of their analysis. Based on this, which firm would you want to work with? Which of the four assurances, Trust, Literacy, Diversity, Complexity, are most influencing your decision?
I would likely go with Uknow Inc. due to being most influenced by diversity. Although inventory optimization is still a rather new field for the company, they have past experience with customers in multiple industries which proves that they have strong adaptability and can be trusted in terms of quality work.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help