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company sales from europe asia-pacific usa and canada range of unit price for the sg's products no. of different standardized products manufactured by sg sales cycle no.of salespeople salary and commisions order cycle in-transit time underage costs overage costs trunk stock annual rental and operation costs for all of the notrth american warehouses expansion plans each new distributor requirement of inventory investment in machinery sales growth rate forecast inventory writeoffs no. of orders processed in 2009 cost of shipping inventory in-transit period different transportation options for 10 pounds of inventory for Global logistics from waltam to atlanta from atlanta to dallas total cost to company for regional warehouse in dallas
cost of capital for company average shipment weight inventory turnover ratio (raw materials and wip inventory)/ total inventory
20% 10% 70% 3 to 200 with most falling between 4 and 20 3000 3 to 6 months 32 33000 plus a tiered commission structure based on revenue they got in each quarter 2 weeks 1 week 10% of the gross margin of any product 0.54% of the unit cost of any product $10000
$750000 $10,000,000 20% 1% of total product costs 119855 0.4 per pound 5 business days
23.6
demand for all of sg's products followed normal distribution for approximately 10% of product line, warehouse managers maintained even higher inventory levels than required by 99% service level target any trunk stock allocated to individual sales rep. counted against the target inventory level for the originating warehouse. stock levels were based on on-hand plus in-transit inventory prices were expected to remain flat
Income Statement Net Sales Expenses COGS Sales, general and administrative Research and Development Depreciation Other Expenses Operating Expenses Interest Expense earnings before taxes Taxes Net Earnings
2010 103.56 46.71 16.8 20.4 3.72 1.2 88.83 3.23 11.50 3.59 7.91
0.31
0.31
Balance Sheet Accounts Assets Cash Receivables Inventory Prepaid Expenses Current Assets Plant Property and equipment Other Long term assets Total long term assets Total Assets Liabilities & Equities Short Term Debt Accounts Payable Accrued Liabilities Current Liabilities Long Term Debt Owners Equity Total Capitalization Total Liabilities & Equity Months of Inventory Cost of goods sold/sales Long term debt/total capital
2008 3.2 3 4.9 4.8 15.9 28.5 2.7 31.2 47.1 2.7 2.3 0.4 5.4 17.2 24.5 41.7 47.1 2.028 0.446 0.412
2009 3.4 4 8.7 6.1 22.2 32.9 4.3 37.2 59.4 3.2 3 0.5 6.7 21.7 31 52.7 59.4 2.69 0.451 0.412
2010 4.08 4.8 12.72 7.32 28.92 39.18 5.16 44.34 73.26 3.2 3.6 0.6 7.4 26.95 38.91 65.86 73.26 2.69 0.451 0.412 0.05 0.05 0.08 0.07 0.24 0.10 0.04 0.04 0.05 0.10 0.07 0.26 0.09 0.05
QUESTIONS when to use average and when to use last year's figure
Inv req for each addtnl distributor = 0.75*3 =2.25 additional borrowing= 5.77 (long term debt)+ 0.91 (share issue)
total inv=
inventory turnover= cogs/ending inventory months of inventory= 12 /inventory turnover ending inventory=months of inventory*cogs/12