Question

You are tasked with briefing the CEO on the financial status of the organization. How do you explain the financial performance of your organization? What measures do you use to explain logistics and supply chain performance? Can the income statement and balance sheet be used to measure logistics and supply chain performance?​

Answer 1

I will brief the financial performance of my organisation to the CEO with important financial statements. Viz, income statement, position statement and cash flow statement. Logistic and supply chain performance can be measured by the following components which are included in income statement and are concerned for decision making on supply chain management. Those are, revenue, Product cost and sales and general administrative costs. The supply chain decisions have a direct impact on working capital, and also working capital flows and balances have a direct impact on the financial viability and performance of an organisation. Supply chain impacts the net income directly. Yes, the income statement and balance sheet can be used to measure logistics and supply chain performance, as it has impact on various components of the business functions and variables and also influence the working capital.