Greaves Brewery is a growing beer operation based out of Trinidad. The purchasing manager for the brewery finds himself struggling in finding a balance between ordering enough bottles to support sales; yet minimizing over ordering to avoid issues associated with growth decelerating trend from an off year, continued impact from government excise tax, tourism, and growth of exports particularly the USA. In addition to previously mentioned concerns ordering the right number of bottles would have to take into consideration the impact of storage limitations, erratic sales, and a looming bottle design change that once introduced will make the inventory of all bottles in storage regardless of new or used totally obsolete. The purchasing manager wishes to be sure to attain sufficient bottles to meet this year’s sales, yet needs to minimize year-end inventories to keep the business profitable, maintain satisfied customers, and minimize losses. Based on available data and utilizing several forecasting and analysis techniques it is our recommendation to order 4,000,000 bottles to align the operation for efficient sales and to adequately support the operation.
In 1924 John Greaves founded the Greaves Brewery in the Island of Trinidad. Besides the company developing an excellent local reputation the beer was also a favorite with the tourist which ultimately led to a modest export business that was launched in 2000. From 1999 to 2003 the company had experienced year over year positive growth as indicated in Figure 1. Sales primarily were derived from 4 peak sales periods they are listed in order of volume ranking :
Over the years the Trinidad’s Government had placed several excise tax on beer. Not only did this create a negative impact to current sales, but based on historical data one can observe a correlation between the tax and sales deceleration at Greaves. The excise tax would even have an impact on years...