Running head: SUSTAINMENT AND GLOBAL SUPPLY CHAIN DECISION-MAKING 1
Sustainment and Global Supply Chain Decision-Making
CASE STUDIES IN SUPPLY MANAGEMENT
Murphy Warehouse Company: Sustainable Logistics
SUSTAINMENT AND GLOBAL SUPPLY CHAIN DECISION-MAKING 2
What are the payback periods for the lawn-to-prairie conversion project, the dock blankets,
the T-9 lighting fixtures, and the storm water project?
Payback period for lawn to prairie conversion:
Installation/acre = $6, 575
Annual lawn maintenance cost/ acre = $5,167
Prairie maintenance cost/ acre = $707
Payback Period = (6,575) ÷ (5167 – 707)
= 1.47 years
Payback period for dock blankets:
According to the case study, the dock blankets were paid back ‘within a few months’ in
the form of heating bill savings.
Payback period for T-8 lighting fixtures:
As written in the case study, the payback period for the T-8 lighting features is 14-16
months.
Payback period for the storm water project:
Installation cost = $580,000
Annual saving from municipal fees = $ 68,000
SUSTAINMENT AND GLOBAL SUPPLY CHAIN DECISION-MAKING 3
Payback period = 580,000 ÷ 68,000
= 8.53 years
Calculate the Net Present Value of the storm water project, given the financial information
in the case
Total discounted cash flow over 15 years = $730,630
Up-front capital requirements = $458,200
Net Present Value = 730,630 – 458,200
= $ 272,431
Evaluate the Pros and Cons of the stormwater project both on financial and non-financial
