Case Study; Blanchard Importing and Distributing Hank Hatch, the subject employee of the study was hired by Blanchard to reduce inventory levels to allow reallocation of funds to the development of wine exportation. After investigating the system in use by Blanchard, Hank realized that the formal system developed in for production scheduling was very different from the system in use. The formal system developed to determine the Order Quantities and reorder points was based on the EOQ and R calculations reviewed in the Productions II course, but the system used in practice at Blanchard were based on estimating monthly sales based on the previous month, and producing enough product to match with a safety factor.
Blanchard Importing and Distribution Co. Thus, the total cost capital is Unit Cost In this case, some cost would be excluded due to not performing in the re-production phase, therefore the selected unit costs for resetting the inventory stock would be direct material, direct labour, federal taxes on replenishment, customers duty due to withdrawal and the variable overhead.
It is determined in the new projected made it evident that Vodka will generate the total unit cost of 2.
Holding Cost The cost is directly associated with the cost of capital for each unit cost, however the projected results show that Vodka would consider the total holding cost of 0.
Comparison of new Economic order quantity EOQ with the old and projected EOQ is the point where the company can reduce the amount of additional costs associated with the production activities.
However, the net results are quite different from the past performance because in the old EOQ, the quantity showed alarge amountand was expected to reduce the cost with this value.
While the other projected EOQ required the minimum value as compared to the old and new projected EOQ,therefore, it was concluded that the best suitable option for the company is to go after the second option because it would reduce more cost of activities as compared to other two.
Thus, excluding the reorder point, projected EOQ would be acceptable for re-productionof inventory. Reorder Point ROP After the critical analysis, it is concluded that the old reorder point of Vodka would be acceptable for the Blanchard because it shows less amount of replenishing the inventory, which will decrease the amount of total cost associated with it.
However, the second option is to acquire the new projected ROP, as it was not good for the company as compared to the first option. However, sudden changes in the cost of capital and return on investment could change the scenario to new projected scenario.
Inventory Assessment The inventory assessment shows that how much the amount would decrease or increase by comparing the EOQ with the reorder point.
In the results, the two previous figures are compared with the new projected results as well as this indicates the level of changes in inventory under the comparison. Therefore, it has been analysed that the total difference in old figure is quite favourable as compared to the new projected results.
On the other hand, the new projected results outflank the option two because it would be more efficient in the reorder and reduce more most as compared to the counterpart. Recommendations After the detailed analysis of the three scenarios, it has been determined that certain changes need to address with additional recommendations given below: First of all, Blanchard should decrease the additional operating cost associated with the skilled labour and reorder of inventory.
It should overcome the over employed criteria by decreasing the level employees under the phase of re-production, as well as it should also control the additional productions in the weekdays and reduce the level of per week days to run the operations in order to reduce the overall cost……………… This is just a sample partial work.
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ESSAYS, term and research papers available for UNLIMITED access. Blanchard Importing and Distributing Co. Inc Distributor and Bottler of alcoholic beverages Expect 20% of before-tax return on any money which is put into wine merchandizing Inability to hire experienced wine salesman and build up an adequate inventory of wines.
1. This is an appeal from a decree of the district court ordering the cancellation of three federal trademark registrations owned by the plaintiff, Blanchard Importing & Distributing Co., Inc. Blanchard Importing and Distributing Co., Inc.
Toby described the initial tasks that he wanted Hank to perform: Hank, during your first few days at Blanchard, I’d like you to become familiar with the general scope of operations of the firm. Managing Business Operations Case Analysis: Blanchard Importing and Distributing Co.
Inc. (HBS Case 9 - - ) Submitted by: Tushar Kothavale ().