What is Startech.com's supply chain strategy? What is the companys current inventory to sales ratio? What is the target the company would like to achieve?

• Using Exhibits 4 & 5, calculate the safety stock for each warehouse (Decentralized model) and the central warehouse (Centralized model). Assuming inventory cost is 75% of the selling price, calculate the inventory investment in the safety tock for all the SKUs.

• As Jeff Brodie, what alternatives would you consider? Be prepared to discuss the advantages and disadvantages of each alternative

use the documents below to help you.

SKU 212 110 . - - CBL150 CBL151 CBL152 CBL153 CBL154 CBL155 CBL156 CBL157 CBL158 CBL200 CBL260 CBL261 CBL275 CBL290 CBL291 CBL292 CBL293 CBL294 CBL295 CBL296 CBL300 CBL301 CBL 302 CBL303 CBL304 CBL305 CBL306 CBL307 CBL308 CBL500 CBL501 CBL600 CBL601 CBL602 Warehouse 10 Warehouse 20 Warehouse 30 Warehouse 40 Warehouse 70 Total Average Average Standard Average Standard Average Standard Average Standard Average Standard Average Standard Selling Price Monthly Sales Deviation Monthly Sales Deviation Monthly Sales Deviation Monthly Sales Deviation Monthly Sales Deviation Monthly Sales Deviation S 6.38 14 21 24 75 17 39 3 4 58 81 $ 8.17 24 21 27 50 66 92 38 17 57 67 174 S S 12.02 7 15 14 18 5 9 4 4 4 17 27 47 31 S 5.88 6 8 9 17 42 56 31 65 10 15 98 101 S 6.28 158 185 99 60 107 56 124 100 217 145 705 407 S 4.45 18 45 7 23 2 4 14 26 41 70 S 4.44 44 36 12 17 25 37 9 9 41 45 131 60 S 6.66 140 125 41 26 87 34 133 176 125 577 243 S S 6.69 13 19 7 2 83 230 8 5 15 20 126 222 S 9.61 5 8 5 9 4 5 2 2 3 6 9 22 21 S 3.30 2 5 5 - - - 8 15 6 12 16 23 S 2.60 3 10 11 25 1 2 2 26 37 S 2.15 3 3 5 2 3 5 6 6 8 15 8 12 26 28 S 6.00 182 407 49 17 79 60 170 457 133 115 613 648 S 7.84 58 44 13 7 9 12 28 18 108 55 S 10.00 14 10 4 6 18 35 14 10 10 7 7 60 43 S 6.22 22 41 2 2 3 12 12 18 19 7 12 61 43 S 91.48 6 8 8 3 2 6 3 3 3 3 5 4 23 15 S 154.92 2 4 1 1 3 3 3 3 2 9 6 S 2.90 36 62 13 20 5 3 7 4 61 61 $ 2.61 39 79 31 24 73 41 49 69 118 94 310 141 S 2.61 5 16 2 3 16 20 23 36 S 2.61 8 7 4 9 9 12 14 S 2.61 10 19 3 7 8 13 21 22 S 2.61 4 9 - 8 7 3 5 5 15 13 $ 2.61 3 9 2 4 3 6 10 29 8 14 26 34 S 2.61 3 3 1 2 10 25 3 6 13 29 30 41 S 3.91 10 15 5 9 4 6 9 10 28 16 S 3.32 12 11 18 44 4 6 17 33 12 16 63 49 S 125.59 1 2 1 2 2 2 2 4 4 S 129.95 3 4 1 1 1 1 1 1 6 4 4 $ 1.15 8 8 2 2 17 27 6 7 19 33 52 54 S 0.90 61 41 41 45 73 41 45 60 31 19 251 93 S 2.39 62 82 15 26 78 104 107 194 72 127 316 EXHIBIT 5: MONTHLY DEMAND - - - - - 334 INTRODUCTION Paul Seed, co-founder and chief executive officer of StarTech.com (StarTech), was concluding his meeting with Jeff Brodie, chief operating officer. It was Monday January 23, 2017, and the two were meeting in the board room at the company's head office in London, Ontario, to review StarTech's supply chain strategy: It looks like we hit our growth targets for 2016, reaching $190 million in sales. We are forecasting year-over-year sales growth of 20 per cent for at least the next three years. To support this level of growth, we will need to examine our supply chain strategy. Sales revenues at StarTech, a manufacturer and distributor of hard-to-find technology products, had grown by almost $70 million in the previous four years. However, the company's growth had increased the complexity of the business, and Paul wanted to ensure that the aggressive sales targets could be supported through strong operations and an efficient supply chain. Of particular interest was the need to support StarTech's customer value proposition of product availability within 24 hours with prudent investments in inventory. Paul continued: We make it easy for information technology professionals to identify, find, get, and use hard-to- find connectivity parts by having the right products, at the right place, at the right time. The key to remaining profitable is balancing product availability with our inventory investments. Conventional inventory management principles do not apply to our unique business model. You have done a good job improving our working capital utilization, but we need to look at how and where additional improvements can be made to our supply chain. I would like you start with a review of how we are making product available to our customers through one of our distribution partners as a test case. Let's focus on cable product line for starters. Specifically, what initiatives should we be considering that will ensure high levels of product availability for our end-users? How can StarTech enhance our value proposition to our customer, while simultaneously improving our operating margins and inventory productivity? Get back to me with your preliminary recommendations by the middle of February. THE GLOBAL COMPUTER CONNECTIVITY HARDWARE INDUSTRY Information technology (IT) hardware such as smartphones, servers, tablets, laptops, and similar devices had a constantly changing array of ports and connections used to interconnect, charge, and attach to peripherals such as external displays, networks, and electronic storage. StarTech distributed a broad portfolio of products that enabled the IT professional to solve these everyday connectivity challenges. Original equipment manufacturers (OEMs) such as Apple, HP, and Lenovo created and marketed technology and mobility products and peripheral devices and cables. Large corporations and mass-market retailers, including Best Buy, Walmart, and Target, bought directly from OEMs. Peripherals and connectivity parts supporting these devices were supplied by third-party manufacturers such as StarTech. Distributors purchased OEM and third-party products in bulk to sell to regional and local resellers and directly to IT professionals and consumers. These distributors operated as "one-stop shops for consumers and businesses. To maintain a wide range of product offerings, distributors purchased and marketed hundreds of thousands of technology products from thousands of hardware manufacturers and software suppliers, selling these products and services to their network of customers. These customers included local and regional distributors and systems integrators who put together technology equipment services for small- and medium-sized enterprises. Distributors typically operated several warehouses, each with a different product mix depending on historical and forecasted demand. Some distributors provided same- day shipment for product orders, relying on common freight carriers such as the United States Postal Service, United Parcel Service (UPS), and Federal Express. As an added service to manufacturers and resellers, distributors provided supply chain management services: order management, customer and technical support, logistics management, and other services. For resellers and corporate IT departments, the advantages of relying on a distributor was speed of delivery and the ability to place an order consisting of products from a range of manufacturers. Distributors also allowed downstream customers to reduce inventories, as products could often be ordered on a just-in-time basis. It was typical for distributors to earn a small profit from each sale and to focus on generating high order volume. For example, the gross profit per item sold by distributors could range from 5 to 20 per cent, and a distributor could earn net income on sales of 13 per cent. STARTECH.COM After a series of new ventures that included running a coin-operated computer business, offering a word- processing service, and starting a video cassette recorder and movie rental operation, Paul Seed and Ken Kalopsis moved into manufacturing and marketing computer peripherals in 1987. Their first product was a dust cover for computers, followed by an anti-glare mesh and an anti-static mesh. Stationery and office products firms such as Hay Stationery Company Limited, in London, Ontario, and Grand & Toy Limited started carrying their products. The venture, which was later named StarTech.com, achieved revenues of $127,000 in 1988. In 2017, StarTech's product portfolio was composed of nearly 3,000 stock keeping units (SKU) across six product categories, with an average selling price of approximately $13. Gross profit margins varied by category but ranged from 20 to 30 per cent Star Tech's six main product categories were add-on cards and EXHIBIT 4: CABLE SKUS AT DISTRIBUTOR Average Inventory at Warehouse Average SKU Rank SKU Case Category Quantity Warehouse 10 Warehouse 20 Warehouse Warehouse 30 40 Warehouse 70 Selling Price S 68 37 37 6.38 8.17 12.02 $ $ $ $ B A B B S S S 100 30 25 80 34 101 136 235 272 53 100 41 65 248 5.88 141 37 125 275 25 73 15 114 206 36 A 60 80 73 15 114 206 36 41 350 S $ $ B B 80 86 36 47 41 A A B S S 135 46 13 17 $ $ $ $ $ $ $ 134 17 20 12