QUESTION 1: Compute the impact on the key financial metrics of the following situation:

This company adopted a new sales and operations planning process that would result in an inventory reduction of 10% (everything else would remain unchanged).

QUESTION 2: How would you present your analysis for this scenario that focuses on:

(i) Operational Excellence? (ii) Product Innovation?

	Base
	$
Sales	1,028.0
Cost of Sales	621.0
Gross Profit	407.0
Operating Expenses (incl SG&A)	340.0
Operating Profit	67.0
Interest Expense	0.0
Other Income	0.0
Pre-Tax Profit	67.0
Taxes (25%)	16.8
Net Profit	50.3