Perry P. (the logistics manager for theCompany PTP) is woken by a phone call in the middle of the night because one of theships carrying5 containers of light bulbs just sank after hitting some ice in the northern pacific ocean. The crew made it out alive in the new unsinkable life boats, and have been picked up by the Coast Guard. Use the facts set out in the assignment in Lesson 7 - Inventory. Talk about therisks that this points out. Talk about costs involved and by whom and how they are incurred. What kinds of reaction plans would you try to put in place after the fact, and what strategies would have helped before?

Value of inventory in a container= $500,000 =1,000,000 lightbulbs

5 containers per ship,

30 days of supply transit time.

Factory has 900 workers a day, at an average wage of $25 an hour.

( As a side note: this is not completely made-up.While working at Thomson as an Engineering Manager the logistics dept. contacted me to try and help them find adequate alternative parts because one of the ships with a month's supply of a major component had in fact sunk sailing from Japan.)