Can you help me understand this Business question?

There are several data information. Requirement: You could just talk about certain variables that the company might take a look at in the future. For example, talk about on hand inventory, inventory related costs, shipping/handling costs from the data. Basically just talk about what we might measure, but mention that we still aren’t 100% sure

There are some information might help: (you can rewrite this in another way.)

From our team’s understanding, the end result is to hopefully reduce on hand inventory (in some cases), increase velocity and decrease overall costs for the manufacturing facilities depending on which parts they order. However, this is where our team’s train-of-thought comes to a crossroad. Given the number of customers in Caterpillar’s North American MPN Network and the time allotted to us to complete the project (~3 months), the way we see it, there are two ways to move forward with the project:

  1. Analyze all (or a large majority) of the customers/parts in North America, as shown in the Excel documents you shared with us. This option would provide analysis that covers a lot of ground and lead to results that are less detailed and would probably not be as refined as they could be.
  2. Analyze a selective, representative group of customers for the scope of the project (the specific number can be discussed, we feel that focusing on 10-15 of Caterpillar’s biggest customers is ideal). These customers would be chosen based on certain factors, such as: revenue generated, unique number of parts they order, lead time and geographic location. The representative group would include customers that are currently classified as ZPUL, ZSCH and ZCOM.

Our team believes option (2) would be more optimal for various reasons: Narrowing our sights on a select group of customers would increase the variety and veracity of information (turnover rate, capacity, costs etc.) gathered. Additionally, we want to explore the option of contacting the customers to inquire more about inventory carrying costs, transportation costs, ordering method transformation costs, etc; this would likely not be achievable to a great degree of detail if we were to analyze every customer in the North American MPN Network. Even though you have provided us with a price range for each unique part (in one of the Excel documents), our team believes that any results achieved from utilizing these numbers would be inconclusive because the price ranges are too vague.

Our team believes option (2) would lead to an analysis that is more detailed and would provide the groundwork for Caterpillar going forward in identifying optimal ordering methods for its other customers.

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