ISCEA

Chagrin Highlands Center

2000 Auburn Drive, Suite 200
Beachwood, OH 44122, USA
T: 800.817.9083 (USA)
E: info@iscea.net
International Supply Chain Education Alliance W: www.iscea.com
www.iscea.org

2017 Global Ptak Prize Challenge

In Association with

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 ISCEA
Chagrin Highlands Center
2000 Auburn Drive, Suite 200
Beachwood, OH 44122, USA
T: 800.817.9083 (USA)
E: info@iscea.net
International Supply Chain Education Alliance W: www.iscea.com
www.iscea.org

The Budget Conundrum

It was a warm sunny fall day and Kimm sat in her office getting ready for
the annual budget meeting. The information was coming into her from all
departments – sales, marketing, operations, supply chain – and she was
trying to make sense of it all. Marketing wants to introduce a new product,
Excelsior, that just came out of development. So far, she had assembled
the following information about the Excelsior product from the different
departments:
• Technology change requires new supplier that may be risky
• We are not sure about how it will affect our existing product. It
definitely will not replace it immediately
• It will be promoted heavily thereby causing a demand spike early in
the product life cycle
• Planned product introduction date to build required inventory for
distribution.
• Build at a higher rate to support the introduction and then reduce
production in 6 months unless forecast changes
• The identified supplier difficulty may delay introduction a month.
Purchasing should know in two months which should give plenty of
time to do the introduction properly but with a delay.
• Actual Product Development costs and Process Development costs are
both higher than expected.
• If expected sales volume is not met there is a financial risk with this
product and may not see the contribution that was anticipated
• On the other hand, early feedback from manufacturing indicates that
the process development may yield a lower unit cost thereby
improving margins
Sales can’t give Kimm a specific forecast number, but they gave her a range
of what future demand should look like with most likely, pessimistic and
optimistic estimates by each of the four marketing families. Kimm knows

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 ISCEA
Chagrin Highlands Center
2000 Auburn Drive, Suite 200
Beachwood, OH 44122, USA
T: 800.817.9083 (USA)
E: info@iscea.net
International Supply Chain Education Alliance W: www.iscea.com
www.iscea.org

that the maximum capacity in the warehouse is 200 pallet positions and the
critical resource has only 7,200 minutes per day and that means that the
five machines are running 24 hours a day. It will take 9-12 months to bring
in more machines with trained operations. There is a local vendor where she
can outsource but the cost is $30 per unit.

Direct Critical
Product Average Lead
Assumptions Total Cost Material Labor Cost Overhead Resource #/pallet
family Sales Price Time
Cost Load/min
Current flagship
product with
solid growth
potential in
domestic market
through new
Arily distribution deal $275 $225 $100 $25 $100 30 5 10
Base product
with solid growth
potential in
Osage export market $250 $230 $90 $20 $120 25 7 20
Sunset Product -
consideration for
Sedalia phase-out $200 $180 $80 $20 $80 20 5 50
New innovation
with extreme
Excelsior growth potential $120 $100 $50 $20 $30 10 5 30

Current
Product family Pessimistic Most Likely Optimistic
average
100 125 150 200
Arily
Osage 50 60 75 110
Sedalia 25 5 10 15
Excelsior 50 180 200 300

Tomorrow morning Kimm must present her recommendation to the CEO on

the best solution for the company. Can your team help her?

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 ISCEA
Chagrin Highlands Center
2000 Auburn Drive, Suite 200
Beachwood, OH 44122, USA
T: 800.817.9083 (USA)
E: info@iscea.net
International Supply Chain Education Alliance W: www.iscea.com
www.iscea.org

Instructions:

Get your team together and work on the case.

We need your solution to the case no later than 5:00PM PST on December 9,
2017.

The solution will be a combination of a PowerPoint presentation and a video

(uploaded either on YouTube or Vimeo).

Teams are not required to create a certain amount of slides, but must use
their best judgment to create a presentation that is effective and persuasive.

The video should be as if you were presenting the case to ISCEA Judges live.

Each video presentation should be a maximum of 15 minutes in length and

all team members are required to make an appearance in the video
presentation.

Please email the solutions (PowerPoint presentation and the Video Link) to
GlobalDesk@iscea.com with a copy to info@scnext.org

In your email, please clearly list each team member's name, email address,
university or company.

Use the following format for the Presentation and Video name as well as
Subject line of the email to us: ISCEA PtakPrize2017 SCNext-TeamName

We will announce the winners on

December 16, 2017 at 6:00 PM PST

All the Best!

Have Fun! Learn! Get Recognized!

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