Absenteeism N Turnover

411 Words2 Pages
Case Study: Peanut Plantation Peanut Plantation (Peanut) is a large processor of peanuts based in Atlanta, Georgia. Peanut’s major products are roasted (plain and salted) peanuts distributed in 6-ounce bags and 18 ounce cans. Peanut’s dominant market position was a result of its focus on product freshness and availability at stores. Peanut’s product development department created a new peanut product that is cinnamon flavored. It was also able to reduce the amount of cholesterol in its peanuts, thus making the peanuts a more healthful snack. However, the new flavor shortened the shelf life of its products. Peanut’s marketing department decided to launch the new product on the Friday before Super Bowl. Advertisements were placed on television, on billboards, and in newspapers circulars one week before Super Bowl Sunday. A sweepstakes contest was also proposed that would award the contest winner a free trip for two to next year’s Super Bowl. Each can of cinnamon peanuts contained an insert with a serial number that could be matched with the winning number on Peanut’s Web site. To meet the estimated first week demand for the new product, manufacturing started making product one month before the introduction. Demand for the two days preceding the Super Bowl was estimated to be 2 Million 18-ounce cans. Demand after the Super Bowl was estimated to be 1 Million cans per week. Manufacturing capacity for the new product is 500,000 per week. Peanut’s price per can to its retail customers would be $ 1.50 which would allow for a gross margin of $ 0.75 per can. Peanut’s cost to produce each can is $ 0.35. Inventory carrying costs per can are $ 0.05. Peanut’s finance department was concerned that heavy promotion and high build-up of inventories would estimate almost all of the profit Peanut would make on each can. Their directive to the product manager was that the product had

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