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Dakota Office Products Case Study Id4373744 Essay

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Dakota Office Products Case Study ID4373744
Background NAME: MEIXIA GAO Dakota Office Product (DOP) is a reputational merchandiser that is expertized in regionally distributing stationary supplies ranging from traditional office supplies to specialty copy paper. By using a typical business model, DOP ships the items from manufacturers and unloaded in its distribution centre. Based on daily orders from commercial business and institutions, those storages are delivered to customers by cartoons. In order to attract more new businesses, DOP adds “Desktop” delivery service to providing package delivery service to individual customers. Later on in 1999, electronic data interchange (EDI) was introduced to the market, which allows customers make quick online order. Despite few customers has switched to this new service, DOP is still bearing an increasing cost and first loss in its historical record in 2000 financial year.
Problem and issue From the statistics shown in DOP income statement 2000 (Exhibit 1), we can see that the total fixed cost including warehouse expense, freight, delivery truck expense etc exceeds the gross margin, which directly results in -1.3% loss in its historical record. There are several issues below which directly result in DOP’s financial loss:
1) The old pricing system is not reliable for new business model
2) New product mixed strategy

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