Ch3
1. What are the key components of the Strategic Profit Model? How can it be used to examine the effect of logistics decisions?

The strategic profit model provides the framework for conducting return on assets (ROA) analysis by incorporating revenues and expenses to generate net profit margin, as well as an inclusion of assets to measure asset turnover. The strategic profit model employs two key components: net profit margin and asset turnover. Net profit margin is net profit divided by sales, and looking at net profit and sales as reported on the income statement suggests multiple ways in which net profit margin can be influenced by managerial decision. The logistics managers should consider sale, costs of goods sold, and total expenses. Net profit Margin Higher profit margins result in higher return on equity.
Asset Turnover is computed by dividing total sales by total assets and provides information of the efficiency capital employed to support the business. If asset turnover decrease, the return on equity decreases. In addition, logistics decisions can influence the speed at which invoices are paid, as reflected in accounts receivable on the balance sheet.

2. How does logistics strategy connect to overall corporate strategy? Is it a one-way or two-way connection?
It’s a two-way connection. The logistics strategy refers to long-term, overall planning and strategy for the pursuit of sustainable development of the logistics and according to logistics development goals and ways and means to achieve their goals and to develop long-term, overall planning and strategy. The modern enterprise competition is essentially the competition between the supply chain competitions and they compete better logistics level and capability. Logistics will affect survival and development of the enterprise.

3. From the point of view of logistics, the BSC approach forces