SCM 301 INDIVIDUAL ASSIGNMENT #3 TOTAL LANDED COST

SCM 301
INDIVIDUAL ASSIGNMENT #3
TOTAL LANDED COST

Please answer the following questions including showing all of your
work:

1)
How many pounds of mango
concentrate are required?

a.
(2 points). In a month?

b.
(2 points). How many in a year?

2)
(5 points). In computing the Total Landed cost for mango
concentrate, we are interested in the incrementalcost per unit (cost
per pound) added along the supply chain, rather than the total cost added at
each step along the chain (for example, total cost of ocean shipping). Why?

3)
(10 points). Using some variation of business process
mapping, graph out the mango concentrate supply chain focusing on when cost is
added to the supply chain. (i.e. Display/draw the process from Papa Growers to
Mom & Pop market, highlighting the points where cost is added to the
process).

(4 points). Why would
tracking this cost be important to International Fruit Distributors?

4)
(45 points). Identify the individual cost components and
the total cost of delivering the product from supplier to retailer. Identify each cost in terms of the incremental
addition to the product cost (Hint: Express your answers in terms of cost per
pound—not total cost). Present your
findings in the table below using 4 significant digits. Yes, some of these may be very small numbers
— but why might that be important?
(Hint: You
should be able to identify 13 separate cost categories in this supply
chain. 3 have been identified for you).

Identified Cost

Cost per Pound

Calculation

1.
Original unit price

$0.3900

Given in the case.

2.
Ocean Freight charge

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13. General
and Administrative fees

Total Landed Cost (Sum of 1-13 above)

5)
(4 points). What conclusion can you draw when comparing
the total landed or delivered cost to the original purchase cost?

(4 points). What does this
suggest about the importance of supply chain management?

6) Assume that Joyce Johnson has asked you recommend ways to cut the
total landed cost of mango concentrate.
Given your above analysis, identify three costs you would recommend for
further study to cut or reduce. How
might you accomplish that? Be
specific and realistic in your ideas and provide the first steps you would
take to make that happen! (Hint:
Starting a new mango grove in San Diego is not a viable option. It would cost much more than $0.39 per pound
to produce the raw product there, plus loose the unique flavor!).

a)
(8 points)
Recommendation #1:
Strategy:

b)
(8 points)
Recommendation #2:
Strategy:

c)
(8 points)
Recommendation #3:
Strategy:

Case modified from Monczka, Trent, and
Handfield, Purchasing and Supply Chain Management, 3rd
edition, South-Western Publishing, 2005.