Case Study Overview

You were hired by the Widget manufacturing company, and since you recently graduated with a degree in logistics and supply chain management, your boss is hoping that you can help answer some questions that the president of the company has been asking.

The Income Statement and Balance Sheet for 2019 were provided to you, along with shipping and warehouse costs for 2018 and 2019.

Create a Professional Video Presentation

With the provided information and the list of questions below, produce a 2-3 minute professional video presentation to present to the company president. Use 'Studio' with PowerPoint slides to create your presentation. Review the information on the Presentation Guide for assistance.

Shipping and Warehouse Costs

2018 and 2019 Shipping and Warehouse Costs

	2018 Units Shipped	2018 Warehouse cost	2019 Units Shipped	2019 Warehouse Cost
Chicago	16,540	$ 156,830	17,562	$ 178,000
New York	7,562	$ 63,417	8,562	$ 65,263
Atlanta	27,506	$ 246,315	28,263	$ 265,856
Denver	15,685	$ 151,975	16,585	$ 176,000
Tampa	15,621	$ 150,623	15,562	$ 152,365
San Antonio	12,658	$ 136,856	12,563	$ 145,256
Bakersfield	9,526	$ 72,632	10,125	$ 78,526
Seattle	11,526	$ 119,563	10,956	$ 120,636

Income Statement

Income Statement 2019

Sales			$ 3,958,555
Cost of goods sold			$ 925,632
Gross Margin			$ 3,032,923
Transportation cost	$ 658,562
Warehousing cost	$ 725,632
Inventory carrying cost	$ 577,456
Other operating costs	$ 356,265
Total operating cost			$ 2,317,915
Earnings before interest and taxes			$ 715,008
Interest			$ 111,000
Taxes			$ 72,000
Net Income			$ 532,008

Balance Sheet

Balance Sheet 2019

Assets
Cash		$ 708,562
Accounts Receivable		$ 362,235
Inventory		$ 1,592,356
Total Current Assets		$ 2,663,153
Net Fixed Assets		$ 823,653
Total Assets		$ 3,486,806
Liabilities
Current Liabilities		$ 1,726,333
Long-term Debt		$ 423,365
Total Liabilities		$ 2,149,698
Shareholders' Equity		$ 1,456,235
Total Liabilities and Equity		$ 3,605,933

Questions

Questions to be addressed

1. What is the cost per unit shipped for each of the warehouses and highlight the warehouse with the best performance for 2018 and for 2019?
2. What is the difference in cost per unit for each of the warehouses and make sure to highlight the warehouse with the best and worst performance for each year?
3. Show the percentage difference in cost per unit for each of the warehouses and highlight the warehouse with the best and worst performance for each year.
4. Your boss told you that your company needs to close one warehouse so you need to recommend to the president which warehouse should be closed based on performance and justify.
5. Use the Income Statement and Balance Sheet and complete a Strategic Profit Model for the company to show the president.
6. What would have been the effect on ROA for 2019 if Transportation cost had been reduced by 10%? Produce an updated Strategic Profit Model for the company?

Notes

• To calculate the Total Expenses add total operating cost + Interest + Taxes
• Net Profit Margin and ROA should be in %
• Other Current Assets = Cash