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Transcript
BACKGROUND
Case 10-2 Coral Drugs
- Group 5
- Anthony Enriquez (1208616379)
- Alejandro Romero (1209130035)
- Muhrah Alrumaihi (1209748823)
- Hussain Nazar (1207356523)
Background
- Operated 114 stores.
- Planned to add an additional 8 to 10 stores over the next five years.
- Coral stocked over 200 different private- label products.
- Buying directly from the manufacturer
- Advertising expenditures were significantly lower.
- Sells at better price than the national brands.
- Coral private-label products were purchased from 26 different suppliers.
CURRENT PROBLEM
Current problem
Product : Coral Dandruff Shampoo.
Twinney Incorporated:
- Distance: ( 600 miles away ).
- Lead time: ( 3 to 4 weeks ).
- Skid held: ( 4,000 units ).
- Annual Demand: ( 20,000 units ).
- Carrying Cost: ( 2% a month).
COMPARISON
Comparison for Coral Dandruff Shampoo
OBJECTIVES
Objectives
- Evaluate current supplier (Twinney Incorporated)
- Evaluate new/potential supplier (Gorman and Irizawa LTD)
- Perform Cost-Benefit analysis
- Coral’s alternatives
- New supplier selection
Analysis
ANALYSIS
Analysis
Possible Solution
POSSIBLE SOLUTION
Action plan
ACTION PLAN
Short term:
- Attempt to negotiate with Twinney again to improve shipping terms/show cost-benefit analysis
- If Twinney refuses, utilize both suppliers to reduce risk of quality and eliminate stockouts
Long term:
- Switch to smaller supplier (G&I) if relationship and quality are held to standards
- Source multiple suppliers to reduce volatility and to meet demand