Decision Making and Problem Solving - Doc

Running head: DECISION MAKING AND PROBLEM SOLVING
Decision Making and Problem Solving
University Name
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Authors’ Note

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Table of Contents
Answer to Question 1.................................................................................................................4
Answer to Question 2.................................................................................................................8
Answer to Question 3...............................................................................................................16
References................................................................................................................................19

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Introduction
Company Overview
Apple Inc. is essentially an American transnational technology corporation headquartered in
California that designs, develops and markets diverse consumer electronics, online services
and computer software. The hardware products of the firm consist of iPhone (smartphone),
Mac personal computer, iPod (a transportable media player), Apple Watch (refers to
innovative smart watch), Apple TV (indicating digital media player) and HomePod (refers to
innovative smart speaker). The consumer software of Apple consists of the macOS and
operating system that is iOS, media player named iTunes, innovative web browser i.e. The
Safari. The firm Apple was founded during the year 1976 by Steve Jobs, Ronald Wayne and
Steve Woznaik for developing and marketing Apple I personal computer (Apple 2017)

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Table
Answer to Question 1
Apple Inc is a successful business concern for years now. The business concern also
encounters issues just like any other business concern; however, the way company responds
to the identified issues is necessarily in concurrence to the strengths as well as weaknesses of
the corporation (Apple 2017).

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Identification of a major issue encountered by Apple
Analysis of the business operations of Apple shows that the business encounters supply chain
issues. In itself, working conditions in different manufacturing locations of Apple Inc is
necessarily an issue in the supply chain of the company (Zsambok 2014). The assembling
partner of Apple Inc that is Foxconn has also pronounced about having poor conditions. In
essence, in factory of Foxconn, their basis of workers also needs to be a topic for further
discussion as well as consideration. As per a report published in the year 2010, over and
above 900000 employees in the warehouses and loads of them were necessarily students that
were between the age ranges of 16 years to 18 years who were compelled to work on the line
for 2 years (Apple 2017). In addition to this, the Chinese warehouses also have several
workers who are compelled to operate overtime on a regular manner. However, based on the
same article it can be said that the results of a survey reflecting that 73.3% of employees
operate 10 hours or more in a day, the average overtime is around 83.2 hours in a month. This
can be referred to as an understandable violation of the official labour regulations, which
essentially restrict monthly overtime to roughly 36 hours every month. Accordingly, out of
20 workers who attempted suicide, around 14 of them succeeded in their attempts, in current
history. However, again at Foxlink that is another component supplier of Apple, a Chinese
worker committed suicide during 2012. Essentially, there are considerable alerts regarding
the working conditions in particularly Foxconn warehouses and other warehouses of
suppliers of Apple Inc.
In addition to this, the second matter of concern of Apple Inc can be associated to the
association between the corporation and the suppliers (Proctor 2014). As per a report
pronounced in The Wall Street Journal, Apple Inc cannot archive the entire anticipation
number of sales by the closing of the year 2012 owing to an inadequate supply chain (Apple
2017). Furthermore, suppliers of Apple do not have the capability to generate adequate parts

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for the demand of the product. Even though Apple Inc has several suppliers all around the
globe, when the entire chain of supply is evaluated piece by piece, it can be observed that
some constituents are chips as well as LCD panels. One of the largest suppliers of LCD
screen has the plan to discontinue providing different products to Apple as disclosed in The
Korea Times, as the Korean corporation no longer finds it advantageous to go on cooperating
with Apple. Owing to this, Apple might be left with only two suppliers of LCD screens who
have inadequate experience. Nevertheless, the two suppliers LGD and AUO are the ones
Apple needs to support. Basically, this can direct the way towards insufficient number of
products to meet the demand of the market can cause a big loss in terms of sales for the
company Apple Inc (Apple 2017). Deficient control by Apple Inc as regards assembly
manufacturers also create an impediment in delivery owing to issues with the worker’s
uprising (Taylor 2013). Essentially, things are going downhill as regards supply chain of
Apple Inc, thus, the high tech corporation have the need to undertake action if it intends to
keep on to maintaining previous levels of success.
Company has tilted innovative programs that essentially fine tune and enhance the internal
processes of the business. However, the company faces certain problems in the global
economy that includes accumulation of capital for diverse non-productive usage. Bain
declares that by the closing of the period 2020, the total financial assets in the entire world
will amount to $900 trillion and the consequence of the same can threaten a surge in non-
financial asset prices namely commodities (Apple 2017). Thus, Apple can be considered to
be a symptom of that issue hoarding cash it gets too scared else wise dull to spend. Again, it
can be witnessed that there is growth in the global middle class that will be intensely resource
hungry and this can either create enormous issues or else opportunities due to the pace of
development (Pettigrew 2014). Thus, it can be hereby said that the future of America mainly
relies on the world system ability in process of innovation.

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Way the management of the corporation Apple dealt with the same
Apple has necessarily created a novel market and altered the entire structure of the market of
both music as well as mobile industries. However, as regards supply chain process, there is
considerable difference from other firms. Nevertheless, successful corporations present a
variance by making impractical ideas possible. Firstly, management of Apple tried to resolve
the issues of supply chain by following the approach “Customer Comes First, Cost Cutting
comes second” (Apple 2017). Essentially, Steve Jobs considered that Apple Inc has the need
to make superior products. As far as new and innovative products have a strong value
proposition as well as differentiation, properly delivering products to specific customers
cannot prove to be a problem. Additionally, members of the staff of the firm Apple Inc spend
huge time with different suppliers to manufacture accurately designed products as Apple
wanted (Pettigrew 2014).
As Apple Inc has several retail stores, the management of the corporation can make demand
forecast easily. Therefore, Apple Inc is able to enhance the inventory turnover by declining
the average inventory. In case if Apple maintains more number of stocks, it is more probable
to get damaged or else obsolete. The product life cycle of Apple Inc is longer than seasonal
items so that the firm Apple Inc is not easily affected by diverse seasonal facets. Nonetheless,
management of Apple Inc takes aggressive steps during the period oh holidays. As demand of
diverse products can get enhanced during the period management of Apple can place orders
by air in place of sea. In essence, this is mainly because Shipping Corporation by particularly
ship takes a lot in comparison to air freight. Furthermore, Apple has a factory in California so
that the corporation orders different products from the factory, resulting in simplified process
of supply chain (Apple 2017). Retail stores of Apple necessarily act as a stocking point
between both upstream as well as downstream. Finally, simplifying procedures of product
can be considered to be an appropriate strategy that can be used for elimination of

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unnecessary lines of product. As such, this can be associated to lean manufacturing. The
management of the company divided their products into different categories so that
management could handle and reduce the intricacy of supply chain.
In addition to this, supply chain management practices of Apple Inc also include
extraordinary control on inventory and complicated software systems that can be considered
secret weapons that keep Apple on top of the worldwide leader board. The supply chain
strategies of Apple for overcoming detected issues include maintaining sustained leadership
in the exercise of supply chain (Velasquez and Hester 2013). Over and above this, firm’s
strategy also includes identification of the concept of a solution of supply chain and
configuration of new trails with the demand creation abilities.
Answer to Question 2
Critical approaches used by the corporation in addressing the major issue
Apple’s Supply Chain Model: The critical approaches that are utilized by the firm Apple in
addressing the identified issue include adoption of the Apple’s Supply Chain that focuses on
research and development, testing of concept, pre-launching, launching and quarterly
reviewing. Essentially, supply chain planning particularly at Apple Inc. can be analysed by
content analysis mechanism that can help in understanding supply chain of modern day.

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New Product Development Process of Supply Chain
Planning: The management of supply chain process at Apple Inc includes new product
development procedure (NPD). Essentially, it is an assimilation of research and development,
marketing and diverse functions under specifically supply chain management that can help in
acquirement of licenses and third party businesses. In this case, management of Apple Inc
makes prepayments to different suppliers in order to secure strategic raw materials and solve
intricacies of supply chain (Apple 2017).

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Inventory Control Approach: Inventory turnover control can be regarded as a traditional
financial dimension to determine the manner the company can efficiently utilize the financial
resource in order to generate sales (Velasquez and Hester 2013).
Maintaining total number of important suppliers: The supply chain management in Apple
Inc also deals with maintaining relationships between different partners of trading. Operating
closely with strategic associates can bring about competitive benefit to the entire firm
(Velasquez and Hester 2013). Apple has around 156 vendors across the world. Essentially,
this amount of suppliers can be considered to be manageable.
Management of Different Facilities of Warehouses: The transportation cost can be
regarded as one of the most significant part of the cost of logistics (Brodbeck and Guillaume
2015). Thereafter, good management of associated function is necessary. Apple Inc has a
centrally situated warehouse in California for management of supply chain.
Stock Keeping Unit: Stock keeping unit also simply referred to as SKA is an important
indication of supply chain intricacy (Pettigrew 2014). Again, another important model of
particularly phone but diverse software is regarded a separate item.
Product Life Cycle Approach: The product life cycle approach adopted by management of
Apple helps in understanding the extent to which products can be sold. Life of important
products of Apple Inc is over and above 12 months (Apple 2017). Demand forecasting using
life cycle can be regarded to be intricate for easing supply chain issues (Taylor 2013).
Recommendation regarding the manner company can respond better
The management of Apple Inc can respond better by properly utilizing the enumeration
metric of inventory turnover. In itself, inventory turnover can be considered to be a
traditional financial dimension that can help in determining the extent of efficiency of

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corporation in utilizing financial resources to generate sales, the higher the better.
Engagement of expert supply chain professionals by Apple Inc can help in utilizing this
metric in the process of inventory management function. The association between diverse
trading partners can be enhanced by maintaining close co-ordination with diverse strategic
partners that subsequently lead to competitive advantage (Proctor 2014). Apple Inc has more
than 156 vendors across the world. The coordination between key vendors and the suppliers
have the need to be maintained for handling supply chain. In addition to this, the management
of Apple Inc currently has 26000 items that can be used for stock keeping unit (SKU) (Apple
2017). Additionally, another indication of supply chain intricacy that is the software and the
items have the need tom estimated on regular basis and altered as per requirement. The
demand forecast system also has the need to be enhanced by the management. In addition to
this, the product also has the need to be designed in a way that leads to greater economic life
as shorter life cycle of products can be considered to be difficult for approximations
(Zsambok 2014).
As such, it can be hereby mentioned that supply chain of Apple Inc can be enhanced by
streamlining the complex system. This includes generating savings of cost and enhancing
firm’s service by concentrating on manufacturing great products utilizing ground breaking
innovation, supplying products that are not seasonal and have a life cycle of over 12 months
(Apple 2017). The service can also be enhanced by lessening the total number of warehouses
to a centralized location. It can also be done by synchronizing and integrating data between
central warehouses and its stores and customers, thereby making operations more effectual
and cost efficient (Bergvall-Kåreborn and Howcroft 2013). In addition to this, management
of Apple Inc can be enhanced by outsourcing process of manufacturing.

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Different decision making and problem solving techniques appropriate for decision
The decision making and problem solving techniques that can be considered to be appropriate
for decision making include
-Identification of the problem
-Describing the cause (Bergvall-Kåreborn and Howcroft 2013)
-Brainstorming diverse solutions
-Implementing a specific solution and finally
-Monitoring the solution (Jennings 2014)
The management of the firm Apple Inc can detect the issues associated to the business
operations. These expert professionals of the corporation might take time to recognize the
difficulty that necessarily repeats itself and describe illustratively the clear picture of the
disruptions to the profitable flow of business functionalities. After identification of the
problem, the management of the corporation can describe the problem and elucidate the
causes of the detected business issue. Again, the management of the firm can brainstorm the
solutions at the time of problem solving after taking into consideration all the rational
possibilities (Collis and Hussey 2013). Subsequently, the management of the corporation can
execute a specific solution that appears to be most likely to solve the detected issue and
appears to be least probable to generate further issues. Thus, using this metric or else
dimension for the purpose of the enumeration of all the probable solution and finally
selecting a specific one for the resolving the issue is an effective way of decision making.
The management of Apple Inc can consider the entire business model of Apple Inc and
analyse the problems supply chain issues faced the business. In this specific case, the

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management of the corporation can put forward compelling questions for projection of
diverse scenarios regarding the future of supply chain factors (Weiss 2014). Thereafter, for
the purpose of describing the issue, the management of the corporation Apple Inc can find out
the centre as this method of centring can aid in the process of avoiding confusions and keep
on thinking clearly.
Annual Financials for Apple Inc
Fiscal year is October-September. All values
USD millions.
2013 2014 2015 2016 2017
Sales/Revenue 170.87B 183.24B 231.28
B
214.23B 229.23B
Cost of Goods Sold (COGS) incl. D&A 107.24B 112.55B 142.26
B
131.51B 141.05B
COGS excluding D&A 100.48B 104.61B 131B 121B 130.89B
Depreciation & Amortization Expense 6.76B 7.95B 11.26B 10.51B 10.16B
Depreciation 5.8B 6.86B 10.01B 9.03B 8.96B
Amortization of Intangibles 960M 1.08B 1.25B 1.47B 1.2B
Gross Income 63.63B 70.69B 89.03B 82.72B 88.19B
2013 2014 2015 2016 2017
SG&A Expense 15.31B 18.03B 22.4B 24.24B 26.84B
Research & Development 4.48B 6.04B 8.07B 10.05B 11.58B
Other SG&A 10.83B 11.99B 14.33B 14.19B 15.26B
Other Operating Expense - - - - -
Unusual Expense 300M - - (548M) -
EBIT after Unusual Expense 48.02B - - 59.03B -
Non Operating Income/Expense 652M (585M) 3.7B (200M) 2.75B
Non-Operating Interest Income 1.62B 1.8B 2.92B 4B 5.2B
Equity in Affiliates (Pretax) - - - - -
Interest Expense 136M 384M 733M 1.46B 2.32B
Gross Interest Expense 136M 384M 733M 1.46B 2.32B
Interest Capitalized - - - - -
Pretax Income 50.16B 53.48B 72.52B 61.37B 64.09B
Income Tax 13.12B 13.97B 19.12B 15.69B 15.74B
Income Tax - Current Domestic 10.42B 9.48B 13B 8.64B 8.1B
Income Tax - Current Foreign 1.56B 2.15B 4.74B 2.11B 1.67B

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Income Tax - Deferred Domestic 1.57B 3.01B 3.19B 4.91B 5.98B
Income Tax - Deferred Foreign (426M) (658M) (1.81B
)
33M (16M)
Income Tax Credits - - - - -
Equity in Affiliates - - - - -
Other After Tax Income (Expense) - - - - -
Consolidated Net Income 37.04B 39.51B 53.39B 45.69B 48.35B
Minority Interest Expense - - - - -
Net Income 37.04B 39.51B 53.39B 45.69B 48.35B
Extraordinaries & Discontinued
Operations
- - - - -
Extra Items & Gain/Loss Sale Of Assets - - - - -
Cumulative Effect - Accounting Chg - - - - -
Discontinued Operations - - - - -
Net Income After Extraordinaries 37.04B 39.51B 53.39B 45.69B 48.35B
Preferred Dividends - - - - -
Net Income Available to Common 37.04B 39.51B 53.39B 45.69B 48.35B
EPS (Basic) 5.72 6.49 9.28 8.35 9.27
Basic Shares Outstanding 6.48B 6.09B 5.75B 5.47B 5.22B
EPS (Diluted) 5.68 6.45 9.22 8.31 9.21
Diluted Shares Outstanding 6.52B 6.12B 5.79B 5.5B 5.25B
EBITDA 55.08B 60.6B 77.89B 68.99B 71.5B
Analysis of the financial reports of the firm Apple Inc reveals the fact that the net income of
the firm fluctuated considerably during the last five years. The net income item of the
financial statement increased considerably during the period 2013, 2014 and 2015. However,
the same declined considerably during 2016 but again showed an upper moving trajectory.
The expenditure on research and development grew considerably during the specified period
and interest expends also increased extensively, indicating rise in costs (Moore 2014). As per
the annual reports of the firm it can be hereby mentioned that failure of the important
logistics of the firm Apple Inc, supply of components or else manufacturing partners is
anticipated to have adverse influence on financial conditions as well as operating outcomes of
the firm (Apple 2017).
Apple Inc has considerable supply chain issues. Majority of the suppliers of Apple operating
in Asia showed large decline in revenues over the last months, both in terms of month-over-

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month as well as year-over-year. In particular, Largan Precision, that is camera module
supplier of the business concern Apple's for specifically iPhones, had observed revenues
decline by 20% during January as compared to the year-ago period.
Catcher Technology Co. that is a supplier for the firm Apple that operates as a metal casing
manufacturer, witnessed its sales to decline by 9.9% as compared to a month before, that
increased from 4.5% as registered from a year ago (Apple 2017).

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Answer to Question 3
Way the market observed the major issue and company responses that followed
The market identified the issue that Apple had certain real problems associated to the supply
chain and the market specialists are of the view that in case if the company intends to stay at
the peak of relevancy, management of the firm have the need to start addressing the same.
The market analysts feel that majority of the time is spent analysing manufactured
controversies of diverse fake news (Newman et al. 2017). Essentially, logistics as well as
supply chain expert suppose that operating procedure of the business concern Apple Inc.’s
might possibly undergo considerable alterations in a bid to recuperate from its current public-
relations calamity. In itself, as pronounced by the New York Times, exercises carried out
between the supplier and the labour can be considered to be less transparent (Apple 2017). It
is evident from the story of Apple Inc, employees operate for excessive hours in diverse
unsafe working conditions in different plants making products for the company Apple Inc.

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Therefore, as per experts the best way for the company Apple to reinstate sustainability
credentials can be used to reconfigure the entire network of seconds and different third tier
suppliers of specific peripherals such as screens, microprocessors as well as flash memory
(Chai et al. 2013). As such, these warehouses are mainly based on labour friendly countries
such as South Korea as well as Japan.
Certainly, supply chain analysts have warned the US based manufactured regarding their
sourcing procedures from mainly China. In essence, the manufacturers anticipate quality fade
to happen in the upcoming weeks preceding particularly the Lunar New Year. In particular,
this happens mainly because low paid members of the staff leave the industrial centres for
celebrating at their home towns as well as villages in various hinterlands (Anderson et al.
2015).
According to the market analysts the Taiwanese contract manufacturing firm Foxconn
International Holdings Inc. appeared to be well-shielded against a decline in overall quality of
production since it hires massive workforce on a 24 hour enormous assembly cycle (Kaner
2014). However, in this current case, the fade was essentially made in process of branding. In
itself, this can be hereby noted that approximately 20 members of the staff of the corporation
committed suicide at the plants of Foxconn for the last two years. Essentially, the market
analysts are of the opinion that the tarnished image of Apple might perhaps influence the
financiers supposedly (Proctor 2014). Besides this, market analysts also put forward the view
that the political as well as environmental calamities also adversely affected the operations of
the firm leading to too much dependence on China and commoditized labour. Apple cannot
bring back the jobs in the Western hemisphere in the upcoming period. In essence, Asian
outsourcing that reached its peak during the global recession is expected to remain. The
management of the firm is not expected to deviate from the trade off corporations (Goldsmith
2015). This is again supposed to affect the supply chain and help in timely delivery of

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products. Thus, it can be said that both these issues are associated to financial terms in the
long term and value of the shareholders.
According to the market specialists, one of the principal supply chain challenges centre
around volatility generated by enhanced market dynamics related to demand. In essence,
these calls for the advanced planning abilities that can present early insights as well as
guidance on effectual responses that can optimize the profitability of portfolio of a
corporation. As such, corporations comparatively less flourishing might want to acquire a
return to a certain growth trajectory by challenging the entire process of implementation of
supply chains. In essence, this might mean that management of the firm Apple Inc might
assume a hybrid model for the purpose of sourcing from diverse countries focused on one
geographical area (Taylor 2013). Again, established as well as emerging nations in
particularly Southeast Asia as well as the Indian subcontinent are necessarily suspended for
novel investment since they carry on upgrading their seaports as well as surface
transportation arteries.

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