SCM301 INDIVIDUAL ASSIGNMENT #3 TOTAL LANDED COST

SCM
301
INDIVIDUAL
ASSIGNMENT #3
TOTAL
LANDED COST

Please
answer the following questions including showing all of your work:

1)
How many pounds of mango concentrate are
required?

a.
(2 points). In a month?

b.
(2 points).
How many in a year?

2)
(5 points).
In computing the Total Landed cost for mango concentrate, we are
interested in the incrementalcost per unit (cost per pound) added along
the supply chain, rather than the total cost added at each step along the chain
(for example, total cost of ocean shipping).
Why?

3)
(10 points).
Using some variation of business process mapping, graph out the mango
concentrate supply chain focusing on when cost is added to the supply
chain. (i.e. Display/draw the process from Papa Growers to
Mom & Pop market, highlighting the points where cost is added to the
process).

(4
points). Why would tracking this cost be
important to International Fruit Distributors?

4)
(45 points).
Identify the individual cost components and the total cost of delivering
the product from supplier to retailer. Identify
each cost in terms of the incremental addition to the product cost (Hint:
Express your answers in terms of cost per pound—not total cost). Present your findings in the table below
using 4 significant digits. Yes, some of
these may be very small numbers — but why might that be important?
(Hint: You should be able to identify 13 separate cost
categories in this supply chain. 3 have been identified for you).

Identified
Cost

Cost
per Pound

Calculation

1. Original
unit price

$0.3900

Given in the case.

2. Ocean
Freight charge

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13. General and Administrative
fees

Total Landed
Cost (Sum of 1-13
above)

5)
(4 points).
What conclusion can you draw when comparing the total landed or delivered
cost to the original purchase cost?

(4
points). What does this suggest about
the importance of supply chain management?

6) Assume
that Joyce Johnson has asked you recommend ways to cut the total landed cost of
mango concentrate. Given your above
analysis, identify three costs you would recommend for further study to cut or
reduce. How might you accomplish that? Be specific and realistic in your
ideas and provide the first steps you would take to make that happen! (Hint: Starting a new mango grove in San Diego is
not a viable option. It would cost much
more than $0.39 per pound to produce the raw product there, plus loose the
unique flavor!).

a)
(8 points)
Recommendation #1:
Strategy:

b)
(8 points)
Recommendation #2:
Strategy:

c)
(8 points)
Recommendation #3:
Strategy:

Case modified from Monczka, Trent, and
Handfield, Purchasing and Supply Chain Management, 3rd
edition, South-Western Publishing, 2005.