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The primary benefit of using a central storage warehouse for all components rather than point-of-use storage is the ease of control and count accuracy. Central storage allows for more efficient inventory management, as all components are stored in a single, controlled location. This centralization simplifies inventory tracking, reduces errors, and improves count accuracy because inventory can be managed and monitored consistently. Additionally, central storage can facilitate better inventory optimization and forecasting.References:

• "Warehouse & Distribution Science" by John Bartholdi and Steven Hackman
• "The Handbook of Logistics and Distribution Management" by Alan Rushton, Phil Croucher, and Peter Baker

Given the context of introducing a new product family with no existing competitors and uncertain demand patterns, the most appropriate strategy is to:

• Current Product Family (To Forecast): Continue producing the established product family based on demand forecasts. This approach leverages historical sales data and existing market understanding to maintain efficient production and distribution.
• New Product Family (To Order): Produce the new product family only after receiving orders from distributors. This minimizes the risk associated with overproduction and inventory holding costs for a new product with uncertain demand.

Producing both product families to forecast (A) or to order (B) does not account for the differing levels of market maturity and demand predictability. Producing the new product family to forecast (D) would be risky due to the lack of historical data and demand uncertainty.

References

• "Supply Chain Management: Strategy, Planning, and Operation" by Sunil Chopra and Peter Meindl.
• APICS Dictionary, 16th edition.

• Financial Metrics Overview: Return on Investment (ROI), Return on Assets (ROA), and Economic Value Added (EVA) are key financial metrics used by firms to assess their financial performance.
• ROI: Measures the profitability of investments relative to their cost, providing insights into how effectively the firm is using its capital to generate profits.
• ROA: Indicates how efficiently a company is using its assets to generate earnings, reflecting overall operational efficiency.
• EVA: Measures a company's financial performance based on residual wealth, calculated by deducting the cost of capital from its operating profit, highlighting value creation for shareholders.
• Financial Sustainability: Utilizing these metrics helps a firm understand its financial health and long-term viability, ensuring that it can sustain operations and generate value over time. By focusing on comprehensive financial metrics, the firm can make informed decisions that support sustainable growth and profitability.

References:

• Kaplan, R. S., & Norton, D. P. (1996). The Balanced Scorecard: Translating Strategy into Action. Harvard Business Review Press.
• Stewart, G. B. (1991). The Quest for Value: The EVA Management Guide. HarperBusiness.

Direct shipping from the manufacturer to the customer, bypassing distribution centers or warehouses, reduces inventory obsolescence. This is because products spend less time in storage and are delivered more quickly to customers, minimizing the risk of inventory becoming outdated or unsellable. Direct shipping can also improve inventory velocity, as products are moved directly to their end destination without intermediate storage, thus reducing the time they spend in the supply chain.References:

• "The Handbook of Logistics and Distribution Management" by Alan Rushton, Phil Croucher, and Peter Baker
• "Supply Chain Management: Strategy, Planning, and Operation" by Sunil Chopra and Peter Meindl