Laburnum Case Analysis

Laburnum Case Analysis
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Laburnum Case Analysis
Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Conclusion..................................................................................................................................8
References..................................................................................................................................9
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Laburnum Case Analysis
Introduction
An important factor determining the successiveness and competitiveness of an organization’s
in the market revolves around its supply chain. This is because one can relate a supply
chain’s efficacy with its competitive advantage in the target market over competition. A
firm’s supply chain management comprises of various elements i.e. planning, information,
sourcing, inventory, production, location, transportation and goods return. According to Zhu,
Krikke and Caniëls (2017), for minimizing the risk and costs involved, these elements are
continuously reviewed by organizations thereby, making significant contributions to gain a
competitive edge over market competitors. The key purpose of this report revolves around the
different issues that Sapphire Energy and AusCotton, a major business unit of Laburnum
Group are facing and the impacts and solutions related with them.
Discussion
Energy Portfolio: Sapphire Energy
1.
The existing ordering system of the Eastern Power under the current arrangement with the
supplier is 1/12th of their monthly annual requirement i.e. 155000/12 = 12916.66 units each
month, which further means that total inventory cost will be
This means the total cost of inventory will be
C (Q/2) = F (D/Q)
1.35(12916.66/2) [phone]/12916.66)
8718.7455+600.00030= 9318.7458
C= cost to carry each unit per year =1.35
Q= each orders quantity =12916.66
D= demand in units every year = 155000
F= fixed cost = 50
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