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Question: answer 14 and number 5 explain a possible alternated of...

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Answer 1-4 and number 5 explain a possible alternated of your own that the managers in the case never discussed but you believe would be a viable alternative.
(And please don’t use anything that’s been previously posted on Zookals)
CASE CASE 1.1 KiddieLand and the Super Gym KiddieLand is a retailer of toys located in the Midwest. manager for KiddieLands eight Chicago stores; and Corporate headquarters is in Chicago, and its 70 stores Sharon Rabiega, Dons assistant for distribution services are located in Minnesota, Wisconsin, Michigan, Illinois, Because the previous year had been unusually profitable, Indiana, Ohio, lowa, and Kentucky. One distribution everyone was in a good mood because this years bonus center is located in Columbus (for Kentucky, Indiana, was 50 percent larger than last years Michigan, and Ohio) and one in Chicago (for Illinois Iowa, Minnesota, and Wisconsin). Nevertheless, A. J. got to the point: You mean t tell me that we expect somebody to stuff a spouse, three kids, a dog, and 450 pounds of Super Gym in a small Randy chimed in, Besides, we cant drop ship Kiddieland markets a full range of toys, electronic games, computers, and play sets. Emphasis is on a full sedan and not have a conniption? line of brand-name products together with selected items sold under the KiddieLand brand. KiddieLands primary Super Gyms from the manufacturer to the consumers competitors include various regional discount chains. address because Super Gym ships only in quantities of The keys to KiddieLands success have been a compre- 10 or more. hensive product line, aggressive pricing, and self-service. Olga was now worried. We cant back out of the Donald Hurst is KiddieL.ands logistics manager. Super Gym now she moaned. I have already committed He is responsible for managing both distribution centers, KiddieLand for 400 sets, and the spring-summer play set for transportation management, and for inventory con- promotion went to press last week Besides, I am depend- trol. Dons primary mission is to make sure all stores are ing on the Super Gym to make my gross margin figures. in stock at all times without maintaining excessive levels of inventory What about SUVs? asked Toth. They make up half the vehicles in our parking lots. Will the three packages fit inside them? One morning in late January, while Don was By now the scope of the problem had become reviewing the new years merchandising plan, he dis covered that starting in March, KiddieLand would begin apparent to everyone at the meeting. At 3 P.M. Don sum promoting the Super Gym Outdoor Childrens Exercise marized the alternatives discussed Center. Don was particularly interested that the new set would sell for $715. In addition, the Super Gym is packaged in three boxes weighing a total of 450 pounds Holy cow! thought Don. The largest set we have sold to date retails for $159 and weighs only 125 pounds. Purchase a two-wheeled trailer for each store. 1. 2. Find a local trucking company that can haul the Super Gym from the KiddieLand store to the customer 3. Stock the Super Gym at the two distribution cen There must be some mistake, thought Don as ters and have the truck that makes delivery runs to the retail stores also make home deliveries. he walked down the hall to the office of Olga Olsen, KiddieLands buyer for play sets. Olga was new on her job and was unusually stressed because both of her assis- tant buyers had just resigned to seek employment on the West Coast 4. Charge for delivery if the customer cannot get the Super Gym home. 5. Negotiate with the Super Gym manufacturer to As soon as Olga saw Don, she exclaimed, Don, ship directly to the customer my friend, I have been meaning to talk to you. Don knew right then that his worst fears were confirmed to meet the following Monday to discuss the alterna- When the meeting adjourned, everyone agreed The next morning Don and Olga met with Randy tives. On Thursday morning a record-breaking blizzard Smith, Dons transportation manager, A. J. Toth, general hit Chicago; everyone went home early. KiddieLand
headquarters was closed on Friday because of the bliz- zard. By Wednesday, the same group met again. Well, Olga, Don interrupted, can we charge the customer for delivery? Don started the meeting. Okay Don began, lets review our options. Sharon, what did you find out about buying trailers for each store? Olga thought a minute. Well, we have never done that before, but then we have never sold a 450-pound item before. It sounds like, Olga continued, our choice Well Sharon began, the best deal I can find is is to either absorb $40 per set or charge the customer 800 per trailer for 70 trailers, plus $250 per store for an adequate selection of bumper hitches, and an addi tional $50 per year per store for licensing and insurance. Unfortunately, bumpers on the newest autos cannot accommodate trailer hitches. delivery That means $16,000 for delivery, she added. One more thing Don said. If we charge for ship- ping, we must include that in the copy for the spring summer brochure. Oh, no, moaned Olga, we only expect to sell Olga smiled. We can make a minor insert in the copy 7 sets per store. That means $368 per Super Gym for if we decide to charge for delivery. However, she continued, delivery, she continued as she punched her calculator, any changes will have to be made to the page proofs -and and $147 in lost gross margin! page proofs are due back to the printer next Monday Randy Smith summarized the second option. So far we can get delivery within 25 miles of most of our stores for $38.21 per set. Actually, Randy continued $38.21 is for delivery 25 miles from the store. The rate Questions 1. List and discuss the advantages and disadvantages of pur chasing a two-wheeled trailer for each store to use for de- would be a little less for under 25 miles and about $1.50 per mile beyond 25 miles livering Super Gyms 2. List and discuss the advantages and disadvantages of hav ing local trucking companies deliver the Super Gym from J. Toth chimed in, According to our market ing research, 85 percent of our customers drive less than store, so a flat fee of $40 for delivery the retail stores to the customers. 25 minutes to the 3. List and discuss the advantages and disadvantages of stock ing Super Gyms at the distribution centers, and then hav- ing the truck that makes deliveries from the distribution center to the retail stores also make deliveries of Super would probably be okay talked to will deliver twice weekly but not daily tor. He said that squeezing an 18-wheeler into som in some homeowners lawn Randy continued, Most delivery companies we Sharon continued, The motor carrier that handles shipments from our distribution centers is a consolida- esub- Gyms to individual customers. 4. List and discuss the advantages and disadvantages of charging customers for home delivery if they are unable to divisions wouldnt make sense. Every time they try, they s, Which alternative would you prefer? why? carry home the Super Gym. knock down a couple of mailboxes and leave truck tracks 6. Draft a brief statement (catalog copy) to be inserted in the Olga added, I talked to Super Gym about ship- ping direct to the customers address, and they said for- firms spring-summer brochure that dearly explains to tial customers the policy you recommended in Question 5. 7. In the first meeting. A. J. asked about SUVs, but there was get it. Whenever they have tried that Olga continued, no further mention of them. How would you follow up on the customer gets two of one box and none of another. his querv?
ym for if we decide to charge for delivery. However she continued, ulator, “any changes will have to be made to the page proofs-and page proofs are due back to the printer next Monday Questions 1. List and discuss the advantages and disadvantages of pur- option. nost of tinued, he rate t $1.50 chasing a two-wheeled trailer for each store to use for de- livering Super Gyms 2. List and discuss the advantages and disadvantages of hav- market-ing local trucking companies deliver the Super Gym from ss than the retail stores to the customers ing Super Gyms at the distribution centers, and then hav- center to the retail stores also make deliveries of Super delivery 3. List and discuss the advantages and disadvantages of stock- nies weing the truck that makes deliveries from the distributiorn handlesGyms to individual customers. nsolida. 4. List and discuss the advantages and disadvantages of me sub-charging customers for home delivery if they are unable to try, they k tracks carry home the Super Gym. 5. Which alternative would you prefer? Why? 6. Draft a brief statement (catalog copy) to be inserted in the said fortial customers the to ntinued,no further mention of them. How would you follow up on another.his query? ut ship- said f firms spring-summer brochure that dearly explains to pote tial customers the policy you recommended in Question 5 or 7. In the first meeting, A. J. asked about SUVs, but there was DIX 1 ations s Management (www.apics.org)
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