Case Analysis: Blanchard Importing and Distributing Co. Inc. (Hbs Case 9 - 673 - 033)

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Managing Business Operations Case Analysis: Blanchard Importing and Distributing Co. Inc. (HBS Case 9 - 673 - 033) Submitted by: Tushar Kothavale (130) NMIMS, FT MBA 2009-2011 1) Correct the Economic Order Quantity (EOQ) and Reorder point (ROP) quantities for each of the five items mentioned in the case. We first predict the annual demand for the year 1972 based on trend for 4 months of 1972 based on corresponding months of 1971. Calculations for Annual demand (R): The assumption made here is that the same trend for sales as that for the four months of 1972 would be followed for the rest of the months of the 1972. Sales prediction for annual demand for year 1972 | | | | | | | | | | | | Feb | Mar | Apr | May | Total…show more content…
2) Since substantial amount of funds are locked in the form of the inventory the company’s growth is hindered in terms of expanding business by means of wine merchandising. We prefer the EOQ/ ROP system as gains from reducing the order/ production size (gains in terms of less value of inventory being produced) which though lead to increase in setup cost far outweigh the gains from Blanchard’s current system (gains in terms of reduction of setup cost) while, costs are that of the value of inventory being produced. 3) What should Hank Hatch recommend to his boss Toby Tyler? 1) The company should install perpetual systems (on-line systems) so that the transactions such as stacked cartons list is updated immediately which can aid in transfer of control stock on real time basis. The advantage of on-line systems is that they are always up-to-date. 2) The company can explore the possibilities of reducing the product range in terms of sizes based on profitability of each item as per size. 3) The company should explore the possibility of installing RFID systems that scan the bottle tags and link it to central databases for size and label, blended whiskey combination, ratio of ingredients. This will reduce the need for manual scanning. 4) Exploring the possibility of implementing JIT (Just in Time) system that can reduce the finished goods inventory at

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