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Posted on Jun 27, 2024

Case 5-2 DVD4Less.com 1. Calculate the net savings of the outsourcing of the warehousing and inventory management to Basileo Logistics. The net savings between the

Case 5-2 DVD4Less.com 1. Calculate the net savings of the outsourcing of the warehousing and inventory management to Basileo Logistics. The net savings between the two alternatives would be the difference between the net income between the two scenarios. See Case 5-2 Microsoft Excel Spreadsheet for more information ( I have attached the spreadsheet)Please read the red material at bottom of the first tab. image text in transcribed

DVD4less Question 1. Net Savings and Input Data Original Modified Order Fill Rate Order Fill Rate 97% 99% Annual Orders 0 0 Orders Filled Correctly 0 0 Service Failure Orders 0 0 Units Redelivered/Rehandled 0 0 Redelivery/Rehandling Cost $0.00 $0.00 Lost Sales Units 0 0 Cost of Lost Sales (Gross Profit) $0.00 $0.00 Total Service Failure Cost $0.00 $0.00 Cost Savings of 1% Improvement $0.00 Sales Less: Invoice Deduction Net Sales Cost of Goods Sold (CGS) Service Failure Cost Gross Margin Transportation Warehousing Inventory Carrying Other Operating Cost Total Operating Cost Earnings Before Interest and tax Interest Tax (40% of EBIT - INT) Net Income Profit Increase of 1% Improvement $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Asset Deployment Inventory Accounts Recievable Cash Fixed Assets Total Assets $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Ratio Analysis Profit Margin ROA Inventory turns/year Trans. as % sales Whse. as % sales Inv. Carry as % Sales Asset Turnover Financial Leverage #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! Return on Net Worth Input Data % Correctly Filled Annual Orders Revenue/Order Gross Profit/Order Lost Sales Rate Rehandling Cost/Order Invoice Deduction Rate Transportation Cost Warehousing Cost Interest Cost Other Operating Cost Inventory Cash Accounts Recievable Fixed Assets Inventory Carrying Rate Net Worth 97% 0 $0.00 $0.00 0% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 0% $0.00 99% 0 $0.00 $0.00 0% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 0% $0.00 DVD4less Strategic Profit Model for 97% Order Fill Rate Sales $0.00 Gross Margin COGS $0.00 $0.00 Net Profit $0.00 Variable Expenses $0.00 Net Profit Margin % Total Expenses Fixed Expenses Sales $0.00 #DIV/0! $0.00 Return on Assets Financial leverage Return on Net Worth $0.00 #DIV/0! 0.00 #DIV/0! Sales Inventory $0.00 Financial leverage=Total Assets/Net Worth $0.00 Asset Turnover Accts. Recievable Financial Leverage= 0.0000 Current Assets #DIV/0! $0.00 $0.00 Total Assets Other Current Assets Fixed Assets $0.00 $0.00 $0.00 Net Worth = $30,000,000.00 Mark Basile BLOG 305 Financial Analysis Modified Strategic Profit Model for 99% Order Fill Rate Sales $0.00 Gross Margin COGS $0.00 $0.00 Net Profit $0.00 Variable Expenses $0.00 Net Profit Margin % Total Expenses Fixed Expenses Sales $0.00 #DIV/0! $0.00 Return on Assets Financial leverage Return on Net Worth $0.00 #DIV/0! 0.00 #DIV/0! Sales Inventory $0.00 Financial leverage=Total Assets/Net Worth $0.00 Asset Turnover Accts. Recievable Financial Leverage= 0.0000 Current Assets #DIV/0! $0.00 $0.00 Total Assets Other Current Assets Fixed Assets $0.00 $0.00 $0.00 Net Worth = $30,000,000.00 DVD4less Question 1. Net Savings and Input Data Original Modified Order Fill Rate Order Fill Rate 97% 99% Annual Orders 0 0 Orders Filled Correctly 0 0 Service Failure Orders 0 0 Units Redelivered/Rehandled 0 0 Redelivery/Rehandling Cost $0.00 $0.00 Lost Sales Units 0 0 Cost of Lost Sales (Gross Profit) $0.00 $0.00 Total Service Failure Cost $0.00 $0.00 Cost Savings of 1% Improvement $0.00 Sales Less: Invoice Deduction Net Sales Cost of Goods Sold (CGS) Service Failure Cost Gross Margin Transportation Warehousing Inventory Carrying Other Operating Cost Total Operating Cost Earnings Before Interest and tax Interest Tax (40% of EBIT - INT) Net Income Profit Increase of 1% Improvement $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Asset Deployment Inventory Accounts Recievable Cash Fixed Assets Total Assets $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Ratio Analysis Profit Margin ROA Inventory turns/year Trans. as % sales Whse. as % sales Inv. Carry as % Sales Asset Turnover Financial Leverage #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! Return on Net Worth Input Data % Correctly Filled Annual Orders Revenue/Order Gross Profit/Order Lost Sales Rate Rehandling Cost/Order Invoice Deduction Rate Transportation Cost Warehousing Cost Interest Cost Other Operating Cost Inventory Cash Accounts Recievable Fixed Assets Inventory Carrying Rate Net Worth 97% 0 $0.00 $0.00 0% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 0% $0.00 99% 0 $0.00 $0.00 0% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 0% $0.00 DVD4less Strategic Profit Model for 97% Order Fill Rate Sales $0.00 Gross Margin COGS $0.00 $0.00 Net Profit $0.00 Variable Expenses $0.00 Net Profit Margin % Total Expenses Fixed Expenses Sales $0.00 #DIV/0! $0.00 Return on Assets Financial leverage Return on Net Worth $0.00 #DIV/0! 0.00 #DIV/0! Sales Inventory $0.00 Financial leverage=Total Assets/Net Worth $0.00 Asset Turnover Accts. Recievable Financial Leverage= 0.0000 Current Assets #DIV/0! $0.00 $0.00 Total Assets Other Current Assets Fixed Assets $0.00 $0.00 $0.00 Net Worth = $30,000,000.00 Mark Basile BLOG 305 Financial Analysis Modified Strategic Profit Model for 99% Order Fill Rate Sales $0.00 Gross Margin COGS $0.00 $0.00 Net Profit $0.00 Variable Expenses $0.00 Net Profit Margin % Total Expenses Fixed Expenses Sales $0.00 #DIV/0! $0.00 Return on Assets Financial leverage Return on Net Worth $0.00 #DIV/0! 0.00 #DIV/0! Sales Inventory $0.00 Financial leverage=Total Assets/Net Worth $0.00 Asset Turnover Accts. Recievable Financial Leverage= 0.0000 Current Assets #DIV/0! $0.00 $0.00 Total Assets Other Current Assets Fixed Assets $0.00 $0.00 $0.00 Net Worth = $30,000,000.00 DVD4less Question 1. Net Savings and Input Data Original Modified Order Fill Rate Order Fill Rate 97% 99% Annual Orders 0 0 Orders Filled Correctly 0 0 Service Failure Orders 0 0 Units Redelivered/Rehandled 0 0 Redelivery/Rehandling Cost $0.00 $0.00 Lost Sales Units 0 0 Cost of Lost Sales (Gross Profit) $0.00 $0.00 Total Service Failure Cost $0.00 $0.00 Cost Savings of 1% Improvement $0.00 Sales Less: Invoice Deduction Net Sales Cost of Goods Sold (CGS) Service Failure Cost Gross Margin Transportation Warehousing Inventory Carrying Other Operating Cost Total Operating Cost Earnings Before Interest and tax Interest Tax (40% of EBIT - INT) Net Income Profit Increase of 1% Improvement $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Asset Deployment Inventory Accounts Recievable Cash Fixed Assets Total Assets $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Ratio Analysis Profit Margin ROA Inventory turns/year Trans. as % sales Whse. as % sales Inv. Carry as % Sales Asset Turnover Financial Leverage #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! Return on Net Worth Input Data % Correctly Filled Annual Orders Revenue/Order Gross Profit/Order Lost Sales Rate Rehandling Cost/Order Invoice Deduction Rate Transportation Cost Warehousing Cost Interest Cost Other Operating Cost Inventory Cash Accounts Recievable Fixed Assets Inventory Carrying Rate Net Worth 97% 0 $0.00 $0.00 0% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 0% $0.00 99% 0 $0.00 $0.00 0% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 0% $0.00 DVD4less Strategic Profit Model for 97% Order Fill Rate Sales $0.00 Gross Margin COGS $0.00 $0.00 Net Profit $0.00 Variable Expenses $0.00 Net Profit Margin % Total Expenses Fixed Expenses Sales $0.00 #DIV/0! $0.00 Return on Assets Financial leverage Return on Net Worth $0.00 #DIV/0! 0.00 #DIV/0! Sales Inventory $0.00 Financial leverage=Total Assets/Net Worth $0.00 Asset Turnover Accts. Recievable Financial Leverage= 0.0000 Current Assets #DIV/0! $0.00 $0.00 Total Assets Other Current Assets Fixed Assets $0.00 $0.00 $0.00 Net Worth = $30,000,000.00 Mark Basile BLOG 305 Financial Analysis Modified Strategic Profit Model for 99% Order Fill Rate Sales $0.00 Gross Margin COGS $0.00 $0.00 Net Profit $0.00 Variable Expenses $0.00 Net Profit Margin % Total Expenses Fixed Expenses Sales $0.00 #DIV/0! $0.00 Return on Assets Financial leverage Return on Net Worth $0.00 #DIV/0! 0.00 #DIV/0! Sales Inventory $0.00 Financial leverage=Total Assets/Net Worth $0.00 Asset Turnover Accts. Recievable Financial Leverage= 0.0000 Current Assets #DIV/0! $0.00 $0.00 Total Assets Other Current Assets Fixed Assets $0.00 $0.00 $0.00 Net Worth = $30,000,000.00 DVD4less Question 1. Net Savings and Input Data Original Modified Order Fill Rate Order Fill Rate 97% 99% Annual Orders 0 0 Orders Filled Correctly 0 0 Service Failure Orders 0 0 Units Redelivered/Rehandled 0 0 Redelivery/Rehandling Cost $0.00 $0.00 Lost Sales Units 0 0 Cost of Lost Sales (Gross Profit) $0.00 $0.00 Total Service Failure Cost $0.00 $0.00 Cost Savings of 1% Improvement $0.00 Sales Less: Invoice Deduction Net Sales Cost of Goods Sold (CGS) Service Failure Cost Gross Margin Transportation Warehousing Inventory Carrying Other Operating Cost Total Operating Cost Earnings Before Interest and tax Interest Tax (40% of EBIT - INT) Net Income Profit Increase of 1% Improvement $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Asset Deployment Inventory Accounts Recievable Cash Fixed Assets Total Assets $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Ratio Analysis Profit Margin ROA Inventory turns/year Trans. as % sales Whse. as % sales Inv. Carry as % Sales Asset Turnover Financial Leverage #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! Return on Net Worth Input Data % Correctly Filled Annual Orders Revenue/Order Gross Profit/Order Lost Sales Rate Rehandling Cost/Order Invoice Deduction Rate Transportation Cost Warehousing Cost Interest Cost Other Operating Cost Inventory Cash Accounts Recievable Fixed Assets Inventory Carrying Rate Net Worth 97% 0 $0.00 $0.00 0% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 0% $0.00 99% 0 $0.00 $0.00 0% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 0% $0.00 DVD4less Strategic Profit Model for 97% Order Fill Rate Sales $0.00 Gross Margin COGS $0.00 $0.00 Net Profit $0.00 Variable Expenses $0.00 Net Profit Margin % Total Expenses Fixed Expenses Sales $0.00 #DIV/0! $0.00 Return on Assets Financial leverage Return on Net Worth $0.00 #DIV/0! 0.00 #DIV/0! Sales Inventory $0.00 Financial leverage=Total Assets/Net Worth $0.00 Asset Turnover Accts. Recievable Financial Leverage= 0.0000 Current Assets #DIV/0! $0.00 $0.00 Total Assets Other Current Assets Fixed Assets $0.00 $0.00 $0.00 Net Worth = $30,000,000.00 Mark Basile BLOG 305 Financial Analysis Modified Strategic Profit Model for 99% Order Fill Rate Sales $0.00 Gross Margin COGS $0.00 $0.00 Net Profit $0.00 Variable Expenses $0.00 Net Profit Margin % Total Expenses Fixed Expenses Sales $0.00 #DIV/0! $0.00 Return on Assets Financial leverage Return on Net Worth $0.00 #DIV/0! 0.00 #DIV/0! Sales Inventory $0.00 Financial leverage=Total Assets/Net Worth $0.00 Asset Turnover Accts. Recievable Financial Leverage= 0.0000 Current Assets #DIV/0! $0.00 $0.00 Total Assets Other Current Assets Fixed Assets $0.00 $0.00 $0.00 Net Worth = $30,000,000.00 DVD4less Question 1. Net Savings and Input Data Original Modified Order Fill Rate Order Fill Rate 97% 99% Annual Orders 0 0 Orders Filled Correctly 0 0 Service Failure Orders 0 0 Units Redelivered/Rehandled 0 0 Redelivery/Rehandling Cost $0.00 $0.00 Lost Sales Units 0 0 Cost of Lost Sales (Gross Profit) $0.00 $0.00 Total Service Failure Cost $0.00 $0.00 Cost Savings of 1% Improvement $0.00 Sales Less: Invoice Deduction Net Sales Cost of Goods Sold (CGS) Service Failure Cost Gross Margin Transportation Warehousing Inventory Carrying Other Operating Cost Total Operating Cost Earnings Before Interest and tax Interest Tax (40% of EBIT - INT) Net Income Profit Increase of 1% Improvement $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Asset Deployment Inventory Accounts Recievable Cash Fixed Assets Total Assets $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Ratio Analysis Profit Margin ROA Inventory turns/year Trans. as % sales Whse. as % sales Inv. Carry as % Sales Asset Turnover Financial Leverage #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! Return on Net Worth Input Data % Correctly Filled Annual Orders Revenue/Order Gross Profit/Order Lost Sales Rate Rehandling Cost/Order Invoice Deduction Rate Transportation Cost Warehousing Cost Interest Cost Other Operating Cost Inventory Cash Accounts Recievable Fixed Assets Inventory Carrying Rate Net Worth 97% 0 $0.00 $0.00 0% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 0% $0.00 99% 0 $0.00 $0.00 0% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 0% $0.00 DVD4less Strategic Profit Model for 97% Order Fill Rate Sales $0.00 Gross Margin COGS $0.00 $0.00 Net Profit $0.00 Variable Expenses $0.00 Net Profit Margin % Total Expenses Fixed Expenses Sales $0.00 #DIV/0! $0.00 Return on Assets Financial leverage Return on Net Worth $0.00 #DIV/0! 0.00 #DIV/0! Sales Inventory $0.00 Financial leverage=Total Assets/Net Worth $0.00 Asset Turnover Accts. Recievable Financial Leverage= 0.0000 Current Assets #DIV/0! $0.00 $0.00 Total Assets Other Current Assets Fixed Assets $0.00 $0.00 $0.00 Net Worth = $30,000,000.00 Mark Basile BLOG 305 Financial Analysis Modified Strategic Profit Model for 99% Order Fill Rate Sales $0.00 Gross Margin COGS $0.00 $0.00 Net Profit $0.00 Variable Expenses $0.00 Net Profit Margin % Total Expenses Fixed Expenses Sales $0.00 #DIV/0! $0.00 Return on Assets Financial leverage Return on Net Worth $0.00 #DIV/0! 0.00 #DIV/0! Sales Inventory $0.00 Financial leverage=Total Assets/Net Worth $0.00 Asset Turnover Accts. Recievable Financial Leverage= 0.0000 Current Assets #DIV/0! $0.00 $0.00 Total Assets Other Current Assets Fixed Assets $0.00 $0.00 $0.00 Net Worth = $30,000,000.00