Final answer:
Constructing a supply chain finance model includes forecasting sales, calculating profit margins, and managing inventory turnover, as well as optimizing warehouse operations. The demand and supply framework is used to forecast revenue and profits are determined by comparing revenue to costs. Key components also include analyzing transportation logistics and considering production viability in the short run.
Step-by-step explanation:
Constructing a supply chain finance model in a spreadsheet software involves several steps. To forecast sales and calculate revenue, mathematical models are developed considering factors like historical sales data, market trends, and seasonal impacts. The demand and supply framework is then used to predict effects on price, quantity demanded, and quantity supplied, thereby aiding in revenue prediction. Additionally, profit margins can be calculated by comparing total revenue and total costs, while return on assets is determined by comparing net income to total assets.
To manage costs effectively, inventory turnover can be calculated to determine how quickly inventory is sold, and transportation logistics require analyzing routes and costs to maximize efficiency. Warehousing optimization involves analyzing storage costs and capacity to identify cost-saving opportunities. To calculate profits, the difference between total revenue and total cost is computed, and the average cost curve helps in identifying profits and losses. Understanding the shutdown point outlines when a company should cease operations temporarily, and pricing strategies dictate when it is viable for a firm to continue production in the short run, ensuring efficient supply chain finance management.