QUESTION 1 (25 MARKS) (a) What is supply chain management (SCM)? Why some organisations perceive SCM as valuable? (3 marks) (b) How does a workforce in a JIT facility differ from the workforce in a conventional facility? (3 marks) (c) Fast Sdn. Bhd. is a dynamic postal (mail, retail, courier, and international), logistics, aviation, financial and supply chain solutions provider with the largest delivery and touchpoint network in Malaysia, offering an extensive retail network experience through its core business segments. The cost management officer has just completed a customer profitability analysis, at the request of the marketing manager. The following information forms the basis of the analysis. Sales revenues and direct costs of the three services offered by Fast Sdn. Bhd. in the year 2020: Premium delivery Standard delivery International delivery Sales (RM) 1,800,000 5,400,000 4,600,000 Direct costs (RM) 1,000,000 3,800,000 3,200,000 Direct customers and corporate customers contributed 30% and 70% respectively of the total sales revenue of the company. Direct customers incurred 35% and corporate customers incurred 65% of the total direct costs for the year. The total cost of each activity during the year was determined, the activity cost per unit of activity driver was calculated and the activities consumed by the two customer groups are as follows: Activity Direct customers Corporate customers Process invoice 8,000 invoices 500 invoices Activity cost per unit of activity driver RM200 per monthly invoice RM50 per cheque RM300 per dispute RM400 per overdue Receive cheque 8,000 cheques 200 disputes 600 cheques 100 disputes Handle disputed invoice Follow up overdue account 300 accounts 50 accounts account RM160 per complaint 120 complains 70 complaints Handle customer complaints RM400 per inspection 90 inspections 37 inspections Inspect delivery Make initial sales call to RM900 per initial call 70 calls corporate customers Make credit check on RM700 per check 40 checks corporate customers Promotions to attract RM100,000 new direct customers Advertisements to attract RM500,000 new corporate customers Required: (i) Compute the profit margin (in RM and %) of the three types of services offered by Fast Sdn. Bhd. (3 marks) (ii) Compute the total customer activity costs for the two customer groups. (7 marks) (iii) Prepare the customer profitability statement for the two customer groups. (3 marks) (iv) Discuss the relative profitability of the two customer groups (in (ii) above) and the three types of services (in (i) above) offered by Fast Sdn. Bhd. (6 marks)
