Question

Based off the folliwng metrics:

Walmart

Return on Invested Capital (ROIC)	15.08%
Return on Assets =	9.00%
Return on Equity (ROE) =	23.00%
ROFL =	1.09%
Profit margin =	4.00%
Asset turnover =	2.31
APT =	5.96
ART =	69.32
INVT=	8.05
PPET=	4.02
C2C =	-10.36

Macys

Return on Invested Capital (ROIC)	9.32%
Return on Assets =	6.00%
Return on Equity (ROE) =	20.00%
ROFL =	1.19%
Profit margin =	4.00%
Asset turnover =	1.32
APT =	3.34
ART =	74.62
INVT=	3.12
PPET=	3.38
C2C =	-12.78

Which supply chain drivers are likely to explain the difference in performance levels for the two companies? In what way do these strategic differences explain differences in outcome?

Which performance measures will be changed by Wal-Mart's strategic action to enter urban markets with smaller-format stores? Analyze the actual performance of this strategy.

Assume that Wal-Mart's current stock price is $68, and Macy's shares sell for $249. Briefly describe what can we conclude about relative performance from this price difference?

Answer 1

Inventory Turn over ratio is the best supply chain driver to measure the performance between two companies computed by dividing Cost of Goods Sold / Average Stock

When product flow varies throughout the year and inventories expand and contract during different periods, more frequent measures of the inventory level need to be taken to generate an accurate measure of the average inventory. The inventory turnover often is reported as the inventory period, which is the number of the days worth of inventory on hand, calculated by dividing the inventory by the average daily cost of goods sold

Details	Walmart	Macys
Inventory Turnover Ratio	8.05	3.12
Inventory days	44.72	15.38

Which means tht Walmart can convert the inventory in to cash in only 45 days

If walmart enters in to urban markets with smaller format stores Profit Margin will get impacted and will have impact on the Inventory Turnover Ratio

Many decisions are based on companies' performance. Performance is the factors that most creditors, investors, managers and other economic actors will be considered. When performance criteria rather than raw numbers are measured as percent or more, the possibility exists comes to performance, both large and small companies in various industries over a period of time, easier to assess and compare. In other words, the corporate performance is product of the activities and return on investment in a given period.