Question

a supply chain has the following information: supplier factory wholesale retailer inventory in days* 30 90 40 20 accounts receivable in days 20 45 30 40 accounts payable in days 30 45 60 37 sourcing unit cost $5 $20 $55 $70 added unit cost $10 $25 $10 $30 sales unit price $20 $55 $70 $110 on-time delivery (%) 85 95 75 95 *this is also the throughput time in days. a. compute the total supply chain throughput time for all the entities from beginning to end. b1. compute the cash-to-cash cycle time for each of the four entities separately. b2. based on this calculation, who is benefiting the most? multiple choice retailer wholesaler supplier factory c. compute the total delivered unit cost in the supply chain from beginning to end. how much profit is there in the supply chain?

Answer 1

The total supply chain throughput time is 180 days. The wholesaler benefits most with a cash-to-cash cycle time of 10 days. For one unit, the total delivered cost is $225, leading to a loss since the sales unit price is $110.

Step-by-step explanation:

• Total Supply Chain Throughput Time

To calculate the total supply chain throughput time, you add the inventory days of supplier, factory, wholesale, and retailer. This gives: 30 (supplier) + 90 (factory) + 40 (wholesale) + 20 (retailer) = 180 days total throughput time.

• Cash-to-Cash Cycle Time

The cash-to-cash cycle time for each entity is calculated as: Inventory days + Accounts receivable days - Accounts payable days.

Supplier: 30 + 20 - 30 = 20 days

Factory: 90 + 45 - 45 = 90 days

Wholesale: 40 + 30 - 60 = 10 days

Retailer: 20 + 40 - 37 = 23 days

Based on this calculation, the wholesaler is benefiting the most with the shortest cash-to-cash cycle time of 10 days.

• Total Delivered Unit Cost and Profit in the Supply Chain

The total delivered unit cost is a sum of the sourcing and added costs across the supply chain: $5 (supplier) + $10 (supplier added) + $20 (factory) + $25 (factory added) + $55 (wholesale) + $10 (wholesale added) + $70 (retailer) + $30 (retailer added) = $225.

The final sales unit price is $110, so the total revenue for one unit is $110. The profit for one unit is revenue minus total delivered cost: $110 - $225 = -$115, indicating a loss.