Greaves Brewery: Bottle Replenishment Case Analysis
Case Synopsis
The following is an analysis of the case, Greaves Brewery: Bottle Replenishment. It details the growing beer operation of Greaves Brewery located in the Caribbean island of Trinidad. The purchasing manager for the company, Alex Benson, is uncertain about how many bottles to order from the company’s German glass supplier. His decision is complicated by the possibility of a new bottle design being introduced that would compromise his existing inventory of bottles. Additionally, he is faced with storage limitations and erratic sales, all of which are impacting his decision. He is also concerned about over ordering to avoid issues from an off year, impact from
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Purchasing manager, Benson had difficulty in determining how many bottles he needed to order to support sales. He was concerned about over ordering to avoid issues with overstocking bottles that would not be used and incur a cost or become a loss when all of the bottles were changed with the new design. The challenge for him was to determine an accurate forecast for Greave’s 2004 sales. When a company plans its ordering or production schedule for a product it sells to the public, it must forecast the customer demand for this product so that it can stock appropriate quantities – neither too much nor too little (Albright, Winston & Zappe, 2010). Data Analysis to Support Decision
According to the case, prior to the implementation of the Trinidadian’s government excise taxes, Greaves Brewery was showing signs of growth (Erskine, Leenders & Piper, 2004). To show growth trends, a Time Series graph was run from 1999 to 2004. However, the purpose of the case is to determine the quantity of bottles that Greaves needs to purchase based on a sales forecast for 2004.
Greaves provided five years and two months of annual sales data. Using Stat Tools, the following analysis were run: Moving Average, Exponential Smoothing Simple, Exponential Smoothing Holt’s, and Exponential Smoothing Winter’s. Following a comparison on the average on all models, the Exponential Smoothing Winter’s was found to be the most suitable model for the case. A graph
| The company has a few different suppliers but relies on each supplier to bring in the stock for them to sell, if they didn’t have more than one supplier then they wouldn’t have anything to sell if one stopped production or went on strike.
The Chinese department store’s order would require significant communication with the UK based research and development centre which would take time to develop new ideas for products and cost money as well. The factory is also running at high levels of capacity with capacity utilisation of 95% which is 30% more than the UK factory. Since the factory is running at a higher capacity utilisation level it means that the number of defective products has raised as well as the care for quality has decreased and volume has increased. Andrew is worried this might not give the good impression that is needed from the company as they are trying to sell high quality British products. The amounts of defective products in the Chinese
“Supply chains cannot tolerate even 24 hours of disruption. So if you lose your place in the supply chain because of wild behavior you could lose a lot. It would be like pouring cement down one of your oil wells” (Friedman, T. n.d.). The introductory quotation from American Journalist Thomas Friedman establishes the purpose of this essay. This essay will briefly exhibit two factors that would change the demand for the product produced by GNC (General Nutrition Center); as elaborated upon in the last Session Long Project (SLP) this is the franchise I’ve selected for study during the duration of this session. Next, will be a short overview of activities that would affect changes in supply. After that, how could quantity demanded by changed? Finally, the type of demand the GNC product promulgates whether it is elastic or inelastic. First, let us dive into the two factors would change the demand for the GNC product.
Seven models were created in order to obtain the model in which all-remaining variables are statistically significant and the final equation to predict sales is as follow:
Stack is a newly established craft brewery located in Sudbury, Ontario. It’s the only brewery plant within the two hours’ drive from Sudbury. With only half a year of operation, Stack had received numerous positive feedbacks through selling their beer to 4 popular local establishment located downtown. Given the positive media article, Stack had developed a bunch of loyal customer. Also, a government grant of $125,000 was given to Stack based on growth and job creation potential. This will help increase the production capacity by 500%, necessitating the development of additional distribution and marketing communication strategy.
Belle Meade Winery has surpassed its own success expectations. The winery’s sales goal for 2009, its first year, was set at 10,000 bottles; sales topped 54,000 bottles. In 2014, revenue from sales was projected to reach three million dollars. While Belle Meade Winery has had tremendous success, it must remain diligent and ready to address potential challenges such as the management of future growth, compliance with Tennessee’s liquor laws, capacity limits, staffing, entry of new competitors into its market, and marketing.
But as the company grows, they will have to let go of this structure and culture. Even Peter wonders if this structure is suitable if the company will grow in the future. SOLUTION: By growing as a corporation in the future, the company should and will hire more and more employees, and as the personnel increases in number, the organizational structure and the culture will change.
Forecasting One of the big threats Wegmans has to be aware of within the supermarket industry is something referred to as the “newsvendor problem”. The newsvendor problem refers to a situation where final demand at the retail level is unknown and any units that are ordered then unsold lose value. This particular problem is associated with most, if not all, industries involving food because demand is often uncertain and food will lose its value once it has expired or gone bad. However, an idea to avoid this problem would be to order less of products in hopes of having fewer inventories left on the shelves to go bad. Unfortunately this route may result in shortages and angered customers. So how is this issue solved? Wegmans decided to address this particular dilemma by implementing a business intelligence (BI) system that has aided in their forecasting process. (Stevenson) In addition to aiding in the inventory
The current problem that Sport Obermeyer is facing is specifically related to the difficulty that the company is facing in balancing the order commitments it needs to make against the risk associated with any inaccuracy in its demand forecasts. Previously, Sport Obermeyer did not have to worry about these types of issues because there was ample production capacity to delay producing until after firm sales orders were received from the retailers. Now that the brand was growing, limited production capacity meant that manufacturing schedules had to be built, at least initially, off of forecasted demand figures. As mentioned above, both over and under-production carried costs that could harm the firm. Figuring out the correct order quantities and sourcing for this upcoming selling season was the immediate short-term goal.
First of all, it tells us that the inventory strategy is consistent regardless of how CSO sales and overall profit from operations perform. This strategy was launched so that the De Beers could control demand and prices. Evidently it also shows that the 1980’s bust is a low peaking point for De Beers, as inventory levels for the first time is significantly higher than OP and CSO SALES.
Supervalu Incorporation is one of the largest grocery stores in the United States with more than 2,400 stores, among these stores the corporation also outsources to third parties which are not named in this discussion (Edmonds, Tsay & Old, 2011). However, grocery stories that are the best known that are in-house under the ownership of Supervalu are as followed; Albertson, Farm Fresh, Jewel-Osco and Save-a-lot (Edmonds, Tsay, & Old, 2011). On January 12th, 2010 Supervalu made the decision to reduce items from their present time inventory. The reduction would reduce the cost of production by 25% from the last segment production earnings of 240,000 (Edmonds, Tsay & Old, 2011). In this discussion, we will try to deduce the effect and impact that will result in Supervalu decision to reduce or eliminate an item from their inventory (Edmonds, Tsay & Old, 2011).
Blattberg and Hoch have stated that (forecasting) “remains an art with tenuous scientific superstructure.” Despite this claim, numerous time series models have been created that can provide significantly more accurate forecasts for future demand than simply ‘going with your best guess.’ If something is not measured, it will never improve, or stated otherwise, you ‘get what you inspect, not what you expect.’ Time series models seek to have an accurate and unbiased forecast. This forecast than can be used to both avoid the waste, in inventory and storage costs, of over-forecasting and the cost of lost sales and unhappy customers due to under-forecasting.
Asahi Breweries’ market performance in the past three years had amazed the Japanese business community. Being a marginal player before 1986, the company had recorded an increase of 71.9% beer sales volume in 1988 while the whole industry grew only 7.6%. At the same period, the company’s market share grew from 10.5% to 20.6%. The company’s current flagship product is its Super Dry beer, a revolutionary beer with an appealing and a distinct sharp taste. Accordingly, Asahi’s competitors have also moved into the dry beer market and attempted to capitalize the surprising profitable opportunity. Thus, Asahi has encountered many challenges resulted from the high growth rate of sales and emerging competition. Asahi’s capital infrastructures and
Joe Williams is the president of Nichols Company (NCO), which manufactures three primary products and has over 355 employees. In addition, NCO has been having some issues with their supply chain in the past few months and it has affected their customer service. This paper will summarize the case study, determine NCO 's appropriate forecasting technique, discuss the impact of aggregate planning, weigh NCO 's various cost factors associated with carrying inventory, and make recommendations for improvement.