And, in order to have very reliable equipment the company must have inventory on hand of both parts and supplies to be able to maintenance and service the equipment. This type of inventory is known as MRO, which means maintenance, repair, and operating supplies. MRO inventory can be very expensive for the company, but if not able it can cost the company more money to have the machine down and not producing any product. Its raw materials such as potatoes are not stored longer than 7 ½ hours, and these are received daily. Since their raw materials go so fast they quickly become what is known as the (WIP) work-in-process; which means that the product moves fast through the production process, and then quickly moves out the door as a finished product within 1½ shifts.
Bloomingdales is a higher end store that sells high quality products at a high price. They are currently losing many customers because the economy will not move out of the stagnation period. Right now the customers need to be saving their money in case they need it later to pay bills rather than spending it on clothing. Many consumers are starting to shop at stores like Macy’s or Kohl’s where they are offered almost the same quality products at lower prices. Some of Bloomingdales biggest competitors are Neiman Marcus, Saks Fifth Avenue, Bergdorf Goodman, Barneys New York, Lord & Taylor and Nordstrom.
C_Fad was a brand new product appealing to both markets; therefore more money was needed to ensure awareness and accessibility to our customers. A moderate sales forecast for Cake was set, based on year three’s final sales numbers, at 650 units, and C_Fad at 520 units, since we were unsure of its success in its first year on the market. Production amounts were set high because there was no inventory on-hand to begin year four, so the team was counting on not stocking out this year. With that in mind, 850 orders of Cake and 1,000 orders of C_Fad were set to be produced. The total amount of machines on-hand seemed appropriate for production, but the number designated to each product was altered since more units were being produced of C_Fad.
The price of honey, globally, has already been on a steady incline (Exhibit 2) and the shortage will further intensify this trend. Another issue UR is facing is that there is also an uneven relationship between the two companies. Harrington Honey is well aware of this and is using this to its advantage by not offering better choices to UR. Additionally, 80% of UR’s honey operations are tied to one major customer, and this customer has tough standards. As stated earlier, Unifine Richardson has approximately one month of honey inventory left and it has to make a decision based on the available options presented by Harrington Honey.
Which eventually lead to a decline in our stock price. One aspect that contributed to our issues within our company was our sales force, in period two we hired too many employees. In the next period we had to redistribute our sales force in different distribution channels. We also had a big problem with our brand positioning and brand awareness in each period. To try to increase our brand awareness we increased our advertising for each brand to help improve our image for our target markets.
Also, over the last decade, consumers in the grocery industry have become less loyal. They will shop around for the best deals rather than habitually shopping at one grocery store. This means that Reed could gain more customers that are currently in its area but who do not shop at Reed by offering private label brands at lower prices. It also means that Reed’s current customers will be less likely to shop at other stores if Reed is offering similar low prices. The increase of private label brands has been a trend in the grocery industry over the last five years.
The equilibrium price for Shelly pies is $6.00 per pie with a production of 4000 pies a month. In considering Mrs. Acres dilemma, if she continues to maintain production levels and raise her prices, she risk the chance of not selling as many pies as she previously sold causing her to have a surplus in supply. One reason the pies has sold so well was because of the demand for quality pies and the price being low. If she changes her price to a higher level, Mrs.
Competitors: The hosiery market had more than 600 brands that were selling in outlet shops some of them are private and house brands. and that created more competition for L'eggs therefore more spending on promotion. but L'eggs major competitors were Burlington industries and Kaiser-Roth corp. these competitors were trying to attract customers to their products by price, they offered hoses for $0.99 which is cheaper than L'eggs, but they were not offering the same quality or even availability of product as L'eggs. Nonetheless L'eggs kept their promotional spending in a try to maintain their market share and even increase it. Macro environment: L'eggs were operating in an environment that was recovering from a lot of recessions, Vietnam war was ending, unemployment rate was high, inflation rates are increasing and women were getting more rights that before so bottom line the way of life was changing and there was a lot of uncertainty in the market.
The fear of having lower SPH forced employees to make the non selling hours off the record and this resulted in losses for the employees, in both, monetary as well as recognition of extra efforts work. The main cause of this problem is the incentive for the sellers. It causes employees to work off the clock in order to increase their SPH. Another important problem that the employees of Nordstrom confront is the peer pressure. Every employee want be in the shifts that had maximum sales to increase their sales-per-hour, so there was a lot of competition.
Prior to polices established by Law of Commerce Henkel Iberica participated in aggressive pricing to increase market share. The consequences of this were a negative effect on margins, contribution margins, and profits on sales. To contend with its competitors, Henkel invested in promotions and additional product mix to increase sales, but due to lack of accuracy in long range forecast it was often left with either over stock that is difficult to reallocate or loss of sales due to out of stock products which eventually led to a decrease of net earnings in sales year before. Accurately forecasting demand is the key to every strategic, tactical, and operational decision designed to keep our business competitive. Obviously it is evident that Henkel Iberica current process isn’t working due to challenges of forecast exactness and demand variability for all the products it offers.