Pricing and Supply Chain Analysis for Sunny Days

SOUTHERN CROSS UNIVERSITY
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Sunny DaysPricing and supply chain analysis
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Sunny Days
Pricing & supply chain analysis
Page 2

1. Overview
Sunny days is engaged in manufacturing beach accessories and swimwear for
women as well as men. Different products they deal include One-piece swimsuits for
women, Board shorts for men, Beach Towels, Beach Umbrellas. Recently the board
of directors approved the budget for 2019 prepared by management accountant.
Target profit margin of company for each product is minimum 20% (Kaplan &
Atkinson, 2015). The report will analyse the pricing strategies and value chain
analysis to assist the entity in achieving the objectives and strategic goals for the
year 2019.
2. Target Pricing Analysis
If the target profit margin is 20% the target cost for the given sales
revenue will be as follows –
From the above it can be analysed that for achieving the target of 20%
profit margin with the given selling prices, target cost for one-piece shall be $ 80,
for board shorts shall be $ 64, for towels shall be $ 40 and for umbrella shall be $
36.
2. Supply Chain Analysis
Recommendation for maintaining or achieving target profit margin through
opportunities of supply chain
Resources for supply chain actually are not a cost rather it is an
investment for enhancing the profit margins. However, importance of supply
chain has been understood only by some big MNCs (Shin & Eksioglu, 2014).
Target profit margin can be achieved or maintained through improving the
supply chain through following –
 Ranking the suppliers as well as customers based on gross margin – both
the customers as well as the vendors shall be ranked straightforward on
the basis of analyzing the top to bottom gross profit and determining
which group account for highest margin percentage. It has different
advantages as it delivers a structure for managing sales as well as
procurement function in future and it may lead for improving the process
that will hold the team accountable for the performance of suppliers and
customers (Ghosh & Shah, 2015).
 Refine the analysis sales channel – starting analyzing the way in which the
customer orders come in. these orders shall be broken into discrete sales
channels. Instead of designating the customer type on the basis of single
location, independent or chain the sales channel attributes shall be
Sunny Days
Pricing & supply chain analysis
Page 3