1. Compile a REPORT for the CEO outlining how DTKs Kidzone compares to other companies in the industry.

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1. Compile a REPORT for the CEO outlining how DTKs Kidzone compares to other companies in the industry.

Assessment

A company that manufactures clothing (DTKs Kidzone) for children is growing fast. The CEO has decided to reconfigure the supply chain in order to cope with growing customer demands and to take advantage of potential cost savings overseas. The manufacturing operations are being moved to China while some distribution centres are moved to Eastern Europe to provide better service to a growing market there. While these changes are being made the CEO is targeting an improvement on stock-holding costs and has requested some data on inventory turns. The following data has been provided for the previous year trading.

            Production materials                                 $1,360,000

            Work in progress                                        3,250,000

            Finished goods                                            5,010,000

The total cost of goods sold last year was $25 million. 

The industry average for inventory turnover is 3.1.

1. Compile a report for the CEO outlining how DTKs Kidzone compares to other companies in the industry.

1. Outline how DTKs Kidzone could improve their inventory turnover. In your report explain the relationship between inventory turnover and stock-holding costs.

1. The CEO of DTKs Kidzone would like to understand how the move to China might affect the inventory holding costs but you know of other supply chain key performance indicators that will be critical to DTKs Kidzone success.

1. In your report to the CEO, discuss the issue of inventory turnover as well as two other supply chain Key Performance Indicators (KPI) such as Order fill rate, Inventory Days, On time delivery etc., advising the CEO how the move might affect DTKs Kidzone in these key supply chain measures.