Trail frames chassis insourcing outsourcing decision

Supply Chain Management Case Problems

Johnson Snacks Case

at the end of Chapter 9, and insourcing/outsourcing decisions (note: make certain to apply the entire insourcing/outsourcing decision process discussed in the text in your analysis) in the

Trail Frames Chassis Case at the end of Chapter 10.

Running Head: Week 4 Assignment

Vu Phung

Davenport University

MGMT 757

Dr. Frank Novakowski

2/04/18

Johnson Snacks Case

In this case, Johnson Snacks has to make a decision on whether they are able to accommodate the requests made by Discount 2. Johnson Snacks need to make an effort to reduce level of stock outs experienced, decrease the prices of the products and increase their level of responsiveness to client requests. Since these new changes have a financial component of costs associated with it, it is necessary that the company make an analysis of the proposal before decision making. That is why the CEO of the company requested that Murray Griffin check on this matter. Comment by Frank Novakowski: needs Comment by Frank Novakowski: them Comment by Frank Novakowski: making a decision

The company business has three types of customers. The grocery segment is the largest and represents nearly more than three quarters of the annual revenues, which is followed by the drug store and the mass merchandise segment. The mass merchandise segment generates the lowest amount of revenues and consequently the lowest amount of profits. It would therefore, not be possible for the prices for the mass merchandise segment to be reduced. Since the supermarket is divided according to location, the product line revenues can also be allocated according to location. Through this analysis, it is clear that the mass merchandise segment is the leading per location followed by the grocery segment and the drug segment. Comment by Frank Novakowski: sales per location?

It may be of importance for the company to maintain the supermarket as a customer since they provide high sales to the firm. Also, from the analysis, it is clear that the Discount 2 provide the company with expense savings by $100000. This means that the location is a convenient one for many deliveries and cost reductions. It is estimated that in case the price reduces by 5%, there will be increase in the sales level to the amount of $380,000. However the benefits of these price reductions may be offset by transportation costs. From a sales standpoint, it might be necessary for the company to accept the proposal provided so as to retain the source of high sales per location (Schaper & Gibson, 2014). Further, the company should look into high level of client responsiveness as it increases the attractiveness of the firm and its products through providing the company with a good reputation of responding to client needs. Stock outs often lead to loss of customers and should be avoided through proper estimation of inventory. In the event that the inventory is not perishable they can add a considerable amount of units in order to prevent stock outs (Hatten, 2015). Comment by Frank Novakowski: Lower cost on lower volume – what is the more important fact – profitability on volume? Comment by Frank Novakowski: Add an s to provide

In conclusion, the company should be concern with too many out of stocks complaints from customers coming from the outlet stores. Perhaps, the solution to this would be to have a backup supply of the most popular products according to the different seasons. The company need to look into an automated system that can keep track of the most purchased item and automatically reordered those item when it’s low. Any written compliant should address in a polite manner and in a responsive way. Comment by Frank Novakowski: ed

Trail Frames Chassis

1. What are the competitive dimensions for the customized chassis and for the proposed TFC chassis. To what extent are these factors similar?

The competitive dimensions for the customized chassis include the presence of a diesel engine without a tunnel for transmission, reduced engine noise and better handling. These features promote the product as high quality improving the competitive status of TFC. TFC produces the chassis in a timely manner by estimating accurate lead times for its clients. Further the company has ensured that the production of the chassis is innovative that allows the manufacture of a unique and up to date chassis in terms of the technology it is based on. Price would be one way that TFC sets itself apart from the competitors. This is because since its production is in high quantities, the manufacturing costs are low making it more affordable to the customer. While innovation and low product lead times remain a competitive feature, price competitiveness will also be experienced on the new chassis though it may lack the element of customization (Erasmus & Rudansky-Kloppers, 2016).

2. .Evaluate the proposal for this new product line. Is this a business that TFC should get into? If yes, why? If no, why not?

Yes, it is a business that TFC should get into. First of all, TFC has had numerous successes in its business strategies and strategic decisions and operations. Through this success, the business has been able to generate sufficient brand equity. Also they have customer loyalty, which makes it easier for them to sell the new product to their customers. Also the company is bound to create a new market by making the new chassis relatively affordable. The main limitation would be that quality wise the new chassis may not be able to match up with that of the competitors.

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3.What would you recommend to John Stickley that TFC should do to increase its sales and to stimulate demand?

One way of increasing the sales is to invest in marketing and advertising of the new product. In this way, the brand is able to create awareness of the new product and educate the market on the features of the product. Also, they can play with the psychology of the customers by creating limited edition chassis that stimulates more demand. Further, the company can participate in product workshops that highlights the strengths of the product. Another way of increasing competitiveness is through price reductions, which enable the customer to consider purchase of the new product in the market (Barney & Hesterly, 2015).

Wrong edition of text was used.

Answers provided to case question do not

align with 3rd edition and to rubric - thus no correct responses.

References

Barney, J. B., & Hesterly, W. (2015). Strategic management and competitive advantage concepts and cases. Pearson.

Erasmus, B., Strydom, J. W., & Rudansky-Kloppers, S. (Eds.). (2016). Introduction to business management. Oxford University Press Southern Africa.

Hatten, T. S. (2015). Small business management: Entrepreneurship and beyond. Nelson Education.

Schaper, M. T., Volery, T., Weber, P. C., & Gibson, B. (2014). Entrepreneurship and small business.