A finished ACC-653 Topic 6 value chain linkage analysis example, following two supplier proposals past the company's boundary and showing the internally cheaper one raising cost for the chain. Searches like "acc 653 topic 6 assignment example", "acc653 topic 6 sample" and "acc-653 topic 6 example" land here.
What a finished ACC-653 Topic 6 value chain linkage analysis looks like
The finished analysis maps the chain first: panel mill, the company's cutting and packing plant, the carrier and the retailer who handles returns, each with its cost per desk. All figures are illustrative. The purchasing proposal on the table switches to a cheaper panel mill, saving $1.80 a desk. Followed downstream, the looser panels add $1.10 of drilling rework in the plant and $2.50 of return handling at the retailer, so the chain spends $1.80 more per desk while the company's own books show a $0.70 saving. The alternative runs the other way: tighter-tolerance panels and sturdier cartons cost $3.50 more, cut plant rework by $2.30 and freight damage claims by $1.40, and remove $4.00 of retailer returns. The company nets only $0.20 a desk, yet the chain saves $630,000 a year on 150,000 desks.
How an ACC-653 Topic 6 example is structured
The analysis is laid out along the chain, upstream to downstream, and every table keeps that order. It opens with purchasing's proposal and why it looks attractive on the company's own cost report. The chain map follows, each party with its cost per desk and the source of every figure. A third part traces the cheaper panels through each link and totals the effect, separating what lands on the company from what lands on the retailer. The tighter-tolerance option is traced fourth in the same layout. A fifth part sets the two results side by side, internal view against chain view, and names the retailer as the party holding most of the saving. The sixth part proposes how the company captures a share, through lower return chargebacks in the next supply agreement. It concludes by recommending the tighter panels and pricing the cheaper supplier it turns down.
The chain mapped before any proposal
Each party from panel mill to retailer appears with its cost per desk, so every later figure has a place in the chain where it lands.
The cheaper panels followed downstream
Looser tolerances save $1.80 at purchase and reappear as drilling rework in the plant and returned desks at the retailer, a net increase for the chain.
Internal view and chain view side by side
A two-column comparison shows the cheaper supplier winning on the company's books and losing across the chain, which puts the whole finding in one table.
Most of the saving located at the retailer
Of the $4.20 a desk the tighter panels remove from the chain, $4.00 falls at the retailer's returns desk, so the company needs a mechanism to share in it.
A contract term to capture the share
The analysis proposes lower return chargebacks in the next supply agreement, turning a saving on the retailer's books into a price the company can negotiate.
Where marks go in ACC-653 Topic 6
Work that halts at the company's own boundary loses credit first, because they judge a supplier on the purchase price and never see what the panels do downstream. A chain diagram with no cost per desk on any link names the parties without measuring anything. Papers that find the chain saving and recommend the tighter panels on that alone overlook that the company itself gains almost nothing, and a finance reader will ask why it should carry the $3.50. Where the rejected supplier is not traced through the same links, the comparison is lopsided and cannot support the recommendation. Treating the retailer's return costs as someone else's problem ignores that a retailer bearing them tends to shift shelf space or terms. A recommendation offering no way to capture the saving is sound analysis with no commercial end.
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ACC-653 Topic 6 questions, answered
How is this different from an internal value chain analysis?
An internal analysis examines the company's own activities, from purchasing to shipping, and asks which ones add cost or value. The strategic cost management literature carried the value chain idea Porter introduced beyond the firm, to suppliers and customers, because a decision inside the company often moves cost across its boundary. The example measures cost at every link, including the ones the company does not own.
Where do the other parties' cost figures come from?
In coursework the case usually supplies them. In practice they come from supplier cost breakdowns, carrier claims data, retailer chargeback and returns reports, and industry benchmarks, and some are estimates. The example labels each figure by source and states which ones are estimates, since a recommendation resting on another company's numbers should show how firm those numbers are.
Why would the company carry a cost that mostly benefits the retailer?
Only if it can share in the benefit or protect something it values, such as shelf space or a supply contract. The example does not assume the retailer will cooperate. It proposes a specific term, lower return chargebacks, and treats the recommendation as conditional on negotiating it, which is the realistic form of most cross-boundary cost decisions.