Consider yourself a summer intern and your summer assignment is to helping the Throx company evaluate their current supply chain practices.You are tasked with evaluating the company's recent performance and recommending changes (decisions) to improve supply chain management performance. The questions that you are required to answer are attached to the end of this case.

Company Background Information

Throxsells higher-end custom-design socks in three-sock sets (rather than two). The company operates from a small packaging and distribution facility in Richmond, CA from which it ships product to customers. Given the company's location and focus, 97% of sales are in California, primarily in the major urban areas of the San Francisco bay area, Los Angeles, Sacramento (and last but not least) San Diego. The company sells exclusively via online sales, at an average price of $18/three-sock set, plus shipping costs charged to the customer.

The company currently orders its product from the Chinese sock manufacturer Zhejiang Datang Hosiery Group Co., Ltd in so-called "Sock City." Socks are shipped via truck to the port of Shanghai, from where they are shipped to the port at Los Angeles-Long Beach via ocean freight. Once offloaded in Los Angeles-Long Beach, the socks are shipped via truck to the Richmond facility. On average, shipment from the manufacturer to the Richmond facility takes 4 weeks. In addition to the transit time required for shipment, the lead time from when an order is placed with the manufacturer to when it is shipped from Zhejiang is 3 weeks. So, the total lead time is considered to be 7 weeks from whenThroxplaces an order until it reaches the Richmond facility. Historically, the standard deviation of lead time has been 1.5 weeks.

Product Orders (Demand) Information

The company provides you with the following information for the past two fiscal years:

Demand Characteristic	2019	2020
Annual Demand, sets	26,918	31,763
Average Weekly Demand	518	611
Standard Deviation of weekly Demand	130	153

Product Forecasting Information

Throx uses two main forecasting methods based on annual data to predict orders for the following year, a weighted moving average and exponential smoothing. They provide you with the following information about forecasts for FY 2017 through FY2020:

	Actual Demand (Three Sock Sets)	Weighted Moving Average Fcst	Exponential Forecast
2017	18,850	15,500	16,300
2018	22,432	17,060	18,340
2019	26,918	20,614	21,613
2020	31,763	24,765	25,857

Weighted Moving Average uses W_t= 0.6, W_t-1=0.3 W_t-2=0.1

Exponential Smoothing uses = 0.8.

Inventory Management Information

The initial inventory for all sock styles combined at the beginning of FY 2021 is 2,250 units. You also have information on current costs, which includes:

• Order cost toThroxfor an order placed with its current supplier, $/order = S = $275
• Holding cost per setper year= H = $2.25
• The company currently pays (P) $7.25 for each set of socks

The company uses a continuous review replenishment policy, and has IT systems in place that allow constant monitoring of key information. Last year, the company used an ROP under this policy of 2,200 units for all sock styles and an order quantity Q of 5,000 units for all sock styles.

Potential Alternatives to Current Supply Chain Management

The company has asked you to evaluate a number of alternatives to their current SCM practices, including at a minimum their choice of supplier, transportation modes, warehouse capacity, order quantities and safety stock.

Alternative Suppliers

The company has contacted potential alternative suppliers in China, who have offered the following information relative to the current supplier: