Question 5: Identify the principal categories of cost impacted by the order pattern shown in Exhibit 12. Describe how or why the order pattern impacts each of these particular cost categories. In your description make explicit use of evidence or data provided in the case and be clear about where in the production/distribution channel each cost is increasing. (20 total points)
Note that you are not being asked to quantify the cost impact of the order pattern shown in Exhibit 12. Rather you are being asked to identify major cost categories affected by the order pattern and to describe the nature of this impact. For example, if inventory costs are affected by the order pattern, describe the type of inventory costs (ordering cost, holding cost, etc.) you are referring to and how such costs either rise or fall due to the order pattern.
An average response will identify and describe at least two cost categories while a top-level response will identify and describe four cost categories and will demonstrate a supply chain perspective. Even though you actually could identify more, do not exceed four—I am looking for depth not a laundry list of items.
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