Supply Chain Management – State the difference between the key inventory indicators; Inventory Turns Ratio and Days of Inventory Outstanding

State the difference between the key inventory indicators; Inventory Turns Ratio and Days of Inventory Outstanding. Income statement of Alexa Corporation from 2019 showed the cost of goods sold (COS) was \$39.40 million, and its average inventory value during the same period was \$8.32 million. Calculate company’s number of Inventory Turns Ratio (ITR) for that year and Days of Inventory Outstanding (DIO).

Supply Chain Management

1. A medical device company sells branded power tools to the hospitals. The annual demand is approximately 1,800 batteries. The cost price per power tool is \$250 for and estimated annual holding cost is 35% of the product’s value. It costs approximately \$180 to place an order (ordering cost). The company currently orders 150 power tools per month (considering LT as 30 days).

a. Determine the ordering, holding, and total inventory costs for the current order quantity.

b. Determine the economic order quantity (EOQ).

c. How many orders should be placed per year using the EOQ?

d. Determine the ordering, holding, and total inventory costs for the EOQ.

2. M/s Futurama, handles a variety of imported auto components. One of the key components is suspension systems. Considering the criticality of this part, company has built a separate storage facility that has annual fixed cost of US\$,5000. Since the components are imported, company is incurring following ordering costs

• Delivery cost per order = US\$2000
• Import Duty per Order = US\$300
• Custom Fees per Order = US\$200
• Import License per annum = US\$200

There is a total demand of 12000 pieces per annum (monthly demand of 1000 pieces with a standard deviation of 100 pieces). The supply lead time is 1 month with a standard deviation of 0.3 month. company is conveniently placing one order every month with an average qty of 1000. The cost per piece is US\$30. The annual holding cost rate is 30%. Calculate cycle stock and safety stock point if the firm is willing to tolerate a 1% chance (Z0.99 = 2.32) of a stockout during an order cycle. Also calculate the total cost of inventory.

3. a. Explain the situation, when it is advisable to use exponential smoothing methods of forecasting over the moving average method of forecasting. For a product in the growth phase of life cycle, which method would you prefer any why?

3. b. State the difference between the key inventory indicators; Inventory Turns Ratio and Days of Inventory Outstanding. Income statement of Alexa Corporation from 2019 showed the cost of goods sold (COS) was \$39.40 million, and its average inventory value during the same period was \$8.32 million. Calculate company’s number of Inventory Turns Ratio (ITR) for that year and Days of Inventory Outstanding (DIO).

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Supply Chain Management – Explain the situation, when it is advisable to use exponential smoothing methods of forecasting over the moving average method of forecasting. For a product in the growth phase of life cycle, which method would you prefer any why?

Explain the situation, when it is advisable to use exponential smoothing methods of forecasting over the moving average method of forecasting. For a product in the growth phase of life cycle, which method would you prefer any why?

Supply Chain Management

1. A medical device company sells branded power tools to the hospitals. The annual demand is approximately 1,800 batteries. The cost price per power tool is \$250 for and estimated annual holding cost is 35% of the product’s value. It costs approximately \$180 to place an order (ordering cost). The company currently orders 150 power tools per month (considering LT as 30 days).

a. Determine the ordering, holding, and total inventory costs for the current order quantity.

b. Determine the economic order quantity (EOQ).

c. How many orders should be placed per year using the EOQ?

d. Determine the ordering, holding, and total inventory costs for the EOQ.

2. M/s Futurama, handles a variety of imported auto components. One of the key components is suspension systems. Considering the criticality of this part, company has built a separate storage facility that has annual fixed cost of US\$,5000. Since the components are imported, company is incurring following ordering costs

• Delivery cost per order = US\$2000
• Import Duty per Order = US\$300
• Custom Fees per Order = US\$200
• Import License per annum = US\$200

There is a total demand of 12000 pieces per annum (monthly demand of 1000 pieces with a standard deviation of 100 pieces). The supply lead time is 1 month with a standard deviation of 0.3 month. company is conveniently placing one order every month with an average qty of 1000. The cost per piece is US\$30. The annual holding cost rate is 30%. Calculate cycle stock and safety stock point if the firm is willing to tolerate a 1% chance (Z0.99 = 2.32) of a stockout during an order cycle. Also calculate the total cost of inventory.

3. a. Explain the situation, when it is advisable to use exponential smoothing methods of forecasting over the moving average method of forecasting. For a product in the growth phase of life cycle, which method would you prefer any why?

3. b. State the difference between the key inventory indicators; Inventory Turns Ratio and Days of Inventory Outstanding. Income statement of Alexa Corporation from 2019 showed the cost of goods sold (COS) was \$39.40 million, and its average inventory value during the same period was \$8.32 million. Calculate company’s number of Inventory Turns Ratio (ITR) for that year and Days of Inventory Outstanding (DIO).

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Contact: Prakash

Call us +919741410271/ 08722788493 or

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Supply Chain Management – M/s Futurama, handles a variety of imported auto components

M/s Futurama, handles a variety of imported auto components. One of the key components is suspension systems. Considering the criticality of this part, company has built a separate storage facility that has annual fixed cost of US\$,5000. Since the components are imported, company is incurring following ordering costs

• Delivery cost per order = US\$2000
• Import Duty per Order = US\$300
• Custom Fees per Order = US\$200
• Import License per annum = US\$200

There is a total demand of 12000 pieces per annum (monthly demand of 1000 pieces with a standard deviation of 100 pieces). The supply lead time is 1 month with a standard deviation of 0.3 month. company is conveniently placing one order every month with an average qty of 1000. The cost per piece is US\$30. The annual holding cost rate is 30%. Calculate cycle stock and safety stock point if the firm is willing to tolerate a 1% chance (Z0.99 = 2.32) of a stockout during an order cycle. Also calculate the total cost of inventory.

Supply Chain Management

1. A medical device company sells branded power tools to the hospitals. The annual demand is approximately 1,800 batteries. The cost price per power tool is \$250 for and estimated annual holding cost is 35% of the product’s value. It costs approximately \$180 to place an order (ordering cost). The company currently orders 150 power tools per month (considering LT as 30 days).

a. Determine the ordering, holding, and total inventory costs for the current order quantity.

b. Determine the economic order quantity (EOQ).

c. How many orders should be placed per year using the EOQ?

d. Determine the ordering, holding, and total inventory costs for the EOQ.

2. M/s Futurama, handles a variety of imported auto components. One of the key components is suspension systems. Considering the criticality of this part, company has built a separate storage facility that has annual fixed cost of US\$,5000. Since the components are imported, company is incurring following ordering costs

• Delivery cost per order = US\$2000
• Import Duty per Order = US\$300
• Custom Fees per Order = US\$200
• Import License per annum = US\$200

There is a total demand of 12000 pieces per annum (monthly demand of 1000 pieces with a standard deviation of 100 pieces). The supply lead time is 1 month with a standard deviation of 0.3 month. company is conveniently placing one order every month with an average qty of 1000. The cost per piece is US\$30. The annual holding cost rate is 30%. Calculate cycle stock and safety stock point if the firm is willing to tolerate a 1% chance (Z0.99 = 2.32) of a stockout during an order cycle. Also calculate the total cost of inventory.

3. a. Explain the situation, when it is advisable to use exponential smoothing methods of forecasting over the moving average method of forecasting. For a product in the growth phase of life cycle, which method would you prefer any why?

3. b. State the difference between the key inventory indicators; Inventory Turns Ratio and Days of Inventory Outstanding. Income statement of Alexa Corporation from 2019 showed the cost of goods sold (COS) was \$39.40 million, and its average inventory value during the same period was \$8.32 million. Calculate company’s number of Inventory Turns Ratio (ITR) for that year and Days of Inventory Outstanding (DIO).

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Contact: Prakash

Call us +919741410271/ 08722788493 or

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Supply Chain Management – A medical device company sells branded power tools to the hospitals

A medical device company sells branded power tools to the hospitals. The annual demand is approximately 1,800 batteries. The cost price per power tool is \$250 for and estimated annual holding cost is 35% of the product’s value. It costs approximately \$180 to place an order (ordering cost). The company currently orders 150 power tools per month (considering LT as 30 days).

a. Determine the ordering, holding, and total inventory costs for the current order quantity.

b. Determine the economic order quantity (EOQ).

c. How many orders should be placed per year using the EOQ?

d. Determine the ordering, holding, and total inventory costs for the EOQ.

Supply Chain Management

1. A medical device company sells branded power tools to the hospitals. The annual demand is approximately 1,800 batteries. The cost price per power tool is \$250 for and estimated annual holding cost is 35% of the product’s value. It costs approximately \$180 to place an order (ordering cost). The company currently orders 150 power tools per month (considering LT as 30 days).

a. Determine the ordering, holding, and total inventory costs for the current order quantity.

b. Determine the economic order quantity (EOQ).

c. How many orders should be placed per year using the EOQ?

d. Determine the ordering, holding, and total inventory costs for the EOQ.

2. M/s Futurama, handles a variety of imported auto components. One of the key components is suspension systems. Considering the criticality of this part, company has built a separate storage facility that has annual fixed cost of US\$,5000. Since the components are imported, company is incurring following ordering costs

• Delivery cost per order = US\$2000
• Import Duty per Order = US\$300
• Custom Fees per Order = US\$200
• Import License per annum = US\$200

There is a total demand of 12000 pieces per annum (monthly demand of 1000 pieces with a standard deviation of 100 pieces). The supply lead time is 1 month with a standard deviation of 0.3 month. company is conveniently placing one order every month with an average qty of 1000. The cost per piece is US\$30. The annual holding cost rate is 30%. Calculate cycle stock and safety stock point if the firm is willing to tolerate a 1% chance (Z0.99 = 2.32) of a stockout during an order cycle. Also calculate the total cost of inventory. (10 Marks)

3. a. Explain the situation, when it is advisable to use exponential smoothing methods of forecasting over the moving average method of forecasting. For a product in the growth phase of life cycle, which method would you prefer any why?

3. b. State the difference between the key inventory indicators; Inventory Turns Ratio and Days of Inventory Outstanding. Income statement of Alexa Corporation from 2019 showed the cost of goods sold (COS) was \$39.40 million, and its average inventory value during the same period was \$8.32 million. Calculate company’s number of Inventory Turns Ratio (ITR) for that year and Days of Inventory Outstanding (DIO).

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Contact: Prakash

Call us +919741410271/ 08722788493 or

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Supply Chain Management June 2018 Assignment

Supply Chain Management

1. You are a SCM consultant appointment by a Pharma company who wants to lease a warehouse in a Metro like Mumbai. Considering short term life cycle of following FIFO, maintaining safety stocks & quick retrieval is extremely critical. Considering high rentals in Metro, leasing space is equally critical. Movement of material fairly depends on -customer’s requirement as forecasted; the process of which is fairly established. Please suggest steps that consultant should keep in mind to suggest solution to his Pharma clients for inventory management. Do you think VMI concept may help here for non-shelf life kind of items here?

2. With the Independence Day around the corner, Small Basket a grocery retailer has announced “Drop till you shop” offer wherein it is offering online groceries at rock bottom prices. Tempted by the attractive prices, Mrs. Chandru decides to shop using the Small Basket app. When she browses the app, she discovers too many appealing deals, and as a result shops much more than what she normally would have. When Small Basket launched this scheme in 2015, they sold goods worth Rs. 26 million. Encouraged by the response, they ran the scheme for three days in 2017. During this three day period, approximately two million people shopped for a variety of produce. There were reports that the company experienced out of stock situation for stocks of several popular items (grocery and staples, fruits and vegetables) that had been exhausted. Predicting the demand for such schemes is always a tricky job. How do you think Small Basket can forecast better to avoid stock-outs in this case? Do firms that forecast correctly rely on cross-functional as well as cross-organizational trust? (With suppliers and distributors). Justify your answer.

3. Starbucks is pretty much a household name in India now. But like many of the most successful worldwide brands, the coffee shop giant has been through its periods of supply chain pain. In fact, during 2007 and 2008, Starbucks leadership began to have serious doubts about the company’s ability to supply its 16,700 outlets globally. As in most commercial sectors at that time, sales were falling. At the same time though, supply chain costs rose by more than \$75 million.

Supply Chain Cost Reduction Challenges

When the supply chain executive team began investigating the rising costs and supply chain performance issues, they found that service was indeed falling short of expectations. Findings included the following problems

• Fewer than 50% of outlet deliveries were arriving on time
• A number of poor outsourcing decisions had led to excessive 3PL expenses
• The supply chain had, (like those of many global organisions) evolved, rather than grown by design, and had hence become unnecessarily complex

The Path to Cost Reduction

Starbucks’ leadership had three main objectives in mind to achieve improved performance and supply chain cost reduction. These were to:

• Reorganize the supply chain
• Reduce cost to serve
• Lay the groundwork for future capability in the supply chain

In order to meet these objectives, Starbucks divided all its supply chain functions into four key groups, known as “plan” “make” and “deliver”. It also opened a new production facility, bringing the total number of U.S. plants to four. Next, the company set about terminating partnerships with all but its most effective 3PLs. The remaining partners were then managed via a weekly scorecard system, which was aligned with renewed service level agreements.

Supply Chain Cost Management Results

By the time Starbucks’ supply chain transformation program was completed, the company had made savings of more than \$500 million over the course of 2009 and 2010, of which a large proportion came out of the supply chain, according to Peter Gibbons, then Executive Vice President of Global Supply Chain Operations.

a. What is the significant and substantial change according to you is taken by Starbucks to improve on overall performance of their supply chain.

b. How do you think objective laid down by Starbucks Leadership would have helped them to achieve this sustainable improvement in supply chain?

How do you suggest IKEA can use Information Technology to support its Supply Chain operations in Malaysia

Supply Chain management

1. UrbanStairs, an online furniture retailer is planning to set up distribution centres pan India. As an SCM consultant, offer advice on how to design the distribution network to deliver products to the customers in a timely manner.

2. While designing a supply chain, various strategic, tactical and operational level decisions need to be made. Supply chains need to be designed in such a way that they can respond immediately to any fluctuations that take place. Supply chain must be designed in such a way that the performance and costs remain unaffected despite various fluctuations. Elaborate on the strategic supply chain decisions a Retail Store selling Electronics and Computer Accessories needs to take.

3. Netherlands-headquartered furniture retailer IKEA will invest 908 million ringgit (\$212.10 million) to set up one of its largest regional distribution and supply chain centres in Malaysia, the Southeast Asian country said.

The supply chain centre will manage an inventory worth 6.6 billion ringgit annually, catering to IKEA’s growth in the ASEAN region, the Malaysian Investment Development Authority (MIDA) said in a statement on Tuesday.

The new 100,000 square metre warehouse will supply to 12 existing retail stores in the region. IKEA plans to grow its number of stores in ASEAN to 20 by 2026.

Malaysia is a significant market for IKEA, with retail stores in the country being among IKEA’s most visited globally. “The establishment (of the warehouse) also adds momentum towards making Malaysia a regional distribution hub and preferred logistics gateway to Asia as outlined in the National Logistics and Trade Facilitation Masterplan and National E-Commerce Strategic Roadmap,” Minister of International Trade and Industry Mustapa Mohamed said.

Malaysia has been encouraging large local conglomerates and multi-national companies to use the country as a gateway to the region through various initiatives, including the principal hub scheme that allows companies to centralise their global activities such as procurement and distribution.

The web of companies that make up IKEA has recently focused ownership of retail operations, which also include shopping centres and food retail, on IKEA Group. Supply chain management and design has transferred to brand owner and franchisor Inter IKEA.

Source: http://retail.economictimes.indiatimes.com/news/home-and-decor/furniture-and-decor/ikea-to-invest-212-mln-to-build-regional-supply-centre-in-malaysia-govt/60185153

a. What are some of the challenges faced by IKEA in managing its global Supply Chain.

b. How do you suggest IKEA can use Information Technology to support its Supply Chain operations in Malaysia?

What are some of the challenges faced by IKEA in managing its global Supply Chain

Supply Chain management

1. UrbanStairs, an online furniture retailer is planning to set up distribution centres pan India. As an SCM consultant, offer advice on how to design the distribution network to deliver products to the customers in a timely manner.

2. While designing a supply chain, various strategic, tactical and operational level decisions need to be made. Supply chains need to be designed in such a way that they can respond immediately to any fluctuations that take place. Supply chain must be designed in such a way that the performance and costs remain unaffected despite various fluctuations. Elaborate on the strategic supply chain decisions a Retail Store selling Electronics and Computer Accessories needs to take.

3. Netherlands-headquartered furniture retailer IKEA will invest 908 million ringgit (\$212.10 million) to set up one of its largest regional distribution and supply chain centres in Malaysia, the Southeast Asian country said.

The supply chain centre will manage an inventory worth 6.6 billion ringgit annually, catering to IKEA’s growth in the ASEAN region, the Malaysian Investment Development Authority (MIDA) said in a statement on Tuesday.

The new 100,000 square metre warehouse will supply to 12 existing retail stores in the region. IKEA plans to grow its number of stores in ASEAN to 20 by 2026.

Malaysia is a significant market for IKEA, with retail stores in the country being among IKEA’s most visited globally. “The establishment (of the warehouse) also adds momentum towards making Malaysia a regional distribution hub and preferred logistics gateway to Asia as outlined in the National Logistics and Trade Facilitation Masterplan and National E-Commerce Strategic Roadmap,” Minister of International Trade and Industry Mustapa Mohamed said.

Malaysia has been encouraging large local conglomerates and multi-national companies to use the country as a gateway to the region through various initiatives, including the principal hub scheme that allows companies to centralise their global activities such as procurement and distribution.

The web of companies that make up IKEA has recently focused ownership of retail operations, which also include shopping centres and food retail, on IKEA Group. Supply chain management and design has transferred to brand owner and franchisor Inter IKEA.

Source: http://retail.economictimes.indiatimes.com/news/home-and-decor/furniture-and-decor/ikea-to-invest-212-mln-to-build-regional-supply-centre-in-malaysia-govt/60185153

a. What are some of the challenges faced by IKEA in managing its global Supply Chain.

b. How do you suggest IKEA can use Information Technology to support its Supply Chain operations in Malaysia?

Netherlands-headquartered furniture retailer IKEA will invest 908 million ringgit

Supply Chain management

1. UrbanStairs, an online furniture retailer is planning to set up distribution centres pan India. As an SCM consultant, offer advice on how to design the distribution network to deliver products to the customers in a timely manner.

2. While designing a supply chain, various strategic, tactical and operational level decisions need to be made. Supply chains need to be designed in such a way that they can respond immediately to any fluctuations that take place. Supply chain must be designed in such a way that the performance and costs remain unaffected despite various fluctuations. Elaborate on the strategic supply chain decisions a Retail Store selling Electronics and Computer Accessories needs to take.

3. Netherlands-headquartered furniture retailer IKEA will invest 908 million ringgit (\$212.10 million) to set up one of its largest regional distribution and supply chain centres in Malaysia, the Southeast Asian country said.

The supply chain centre will manage an inventory worth 6.6 billion ringgit annually, catering to IKEA’s growth in the ASEAN region, the Malaysian Investment Development Authority (MIDA) said in a statement on Tuesday.

The new 100,000 square metre warehouse will supply to 12 existing retail stores in the region. IKEA plans to grow its number of stores in ASEAN to 20 by 2026.

Malaysia is a significant market for IKEA, with retail stores in the country being among IKEA’s most visited globally. “The establishment (of the warehouse) also adds momentum towards making Malaysia a regional distribution hub and preferred logistics gateway to Asia as outlined in the National Logistics and Trade Facilitation Masterplan and National E-Commerce Strategic Roadmap,” Minister of International Trade and Industry Mustapa Mohamed said.

Malaysia has been encouraging large local conglomerates and multi-national companies to use the country as a gateway to the region through various initiatives, including the principal hub scheme that allows companies to centralise their global activities such as procurement and distribution.

The web of companies that make up IKEA has recently focused ownership of retail operations, which also include shopping centres and food retail, on IKEA Group. Supply chain management and design has transferred to brand owner and franchisor Inter IKEA.

Source: http://retail.economictimes.indiatimes.com/news/home-and-decor/furniture-and-decor/ikea-to-invest-212-mln-to-build-regional-supply-centre-in-malaysia-govt/60185153

a. What are some of the challenges faced by IKEA in managing its global Supply Chain.

b. How do you suggest IKEA can use Information Technology to support its Supply Chain operations in Malaysia?

While designing a supply chain, various strategic, tactical and operational level decisions need to be made

Supply Chain management

1. UrbanStairs, an online furniture retailer is planning to set up distribution centres pan India. As an SCM consultant, offer advice on how to design the distribution network to deliver products to the customers in a timely manner.

2. While designing a supply chain, various strategic, tactical and operational level decisions need to be made. Supply chains need to be designed in such a way that they can respond immediately to any fluctuations that take place. Supply chain must be designed in such a way that the performance and costs remain unaffected despite various fluctuations. Elaborate on the strategic supply chain decisions a Retail Store selling Electronics and Computer Accessories needs to take.

3. Netherlands-headquartered furniture retailer IKEA will invest 908 million ringgit (\$212.10 million) to set up one of its largest regional distribution and supply chain centres in Malaysia, the Southeast Asian country said.

The supply chain centre will manage an inventory worth 6.6 billion ringgit annually, catering to IKEA’s growth in the ASEAN region, the Malaysian Investment Development Authority (MIDA) said in a statement on Tuesday.

The new 100,000 square metre warehouse will supply to 12 existing retail stores in the region. IKEA plans to grow its number of stores in ASEAN to 20 by 2026.

Malaysia is a significant market for IKEA, with retail stores in the country being among IKEA’s most visited globally. “The establishment (of the warehouse) also adds momentum towards making Malaysia a regional distribution hub and preferred logistics gateway to Asia as outlined in the National Logistics and Trade Facilitation Masterplan and National E-Commerce Strategic Roadmap,” Minister of International Trade and Industry Mustapa Mohamed said.

Malaysia has been encouraging large local conglomerates and multi-national companies to use the country as a gateway to the region through various initiatives, including the principal hub scheme that allows companies to centralise their global activities such as procurement and distribution.

The web of companies that make up IKEA has recently focused ownership of retail operations, which also include shopping centres and food retail, on IKEA Group. Supply chain management and design has transferred to brand owner and franchisor Inter IKEA.

Source: http://retail.economictimes.indiatimes.com/news/home-and-decor/furniture-and-decor/ikea-to-invest-212-mln-to-build-regional-supply-centre-in-malaysia-govt/60185153

a. What are some of the challenges faced by IKEA in managing its global Supply Chain.

b. How do you suggest IKEA can use Information Technology to support its Supply Chain operations in Malaysia?

UrbanStairs, an online furniture retailer is planning to set up distribution centres pan India

Supply Chain management

1. UrbanStairs, an online furniture retailer is planning to set up distribution centres pan India. As an SCM consultant, offer advice on how to design the distribution network to deliver products to the customers in a timely manner.

2. While designing a supply chain, various strategic, tactical and operational level decisions need to be made. Supply chains need to be designed in such a way that they can respond immediately to any fluctuations that take place. Supply chain must be designed in such a way that the performance and costs remain unaffected despite various fluctuations. Elaborate on the strategic supply chain decisions a Retail Store selling Electronics and Computer Accessories needs to take.

3. Netherlands-headquartered furniture retailer IKEA will invest 908 million ringgit (\$212.10 million) to set up one of its largest regional distribution and supply chain centres in Malaysia, the Southeast Asian country said.

The supply chain centre will manage an inventory worth 6.6 billion ringgit annually, catering to IKEA’s growth in the ASEAN region, the Malaysian Investment Development Authority (MIDA) said in a statement on Tuesday.

The new 100,000 square metre warehouse will supply to 12 existing retail stores in the region. IKEA plans to grow its number of stores in ASEAN to 20 by 2026.

Malaysia is a significant market for IKEA, with retail stores in the country being among IKEA’s most visited globally. “The establishment (of the warehouse) also adds momentum towards making Malaysia a regional distribution hub and preferred logistics gateway to Asia as outlined in the National Logistics and Trade Facilitation Masterplan and National E-Commerce Strategic Roadmap,” Minister of International Trade and Industry Mustapa Mohamed said.

Malaysia has been encouraging large local conglomerates and multi-national companies to use the country as a gateway to the region through various initiatives, including the principal hub scheme that allows companies to centralise their global activities such as procurement and distribution.

The web of companies that make up IKEA has recently focused ownership of retail operations, which also include shopping centres and food retail, on IKEA Group. Supply chain management and design has transferred to brand owner and franchisor Inter IKEA.

Source: http://retail.economictimes.indiatimes.com/news/home-and-decor/furniture-and-decor/ikea-to-invest-212-mln-to-build-regional-supply-centre-in-malaysia-govt/60185153

a. What are some of the challenges faced by IKEA in managing its global Supply Chain.

b. How do you suggest IKEA can use Information Technology to support its Supply Chain operations in Malaysia?