Case Study Kroger
Ultimately, variations in fixed and variable costs and their impact on profits made me think. At Kroger, I reviewed the operating statement each month and focused on items I could control, such as: salaries and inventory.
Management salaries were fixed, but other salaries were variable. Initially, schedules were created based upon sales. After persuasion, they moved to units sold as a factor for scheduling. Primarily, my argument was one store may sell a lobster and another store 20 cans of tuna for same $20. Clearly, there is more work involved in completing the sale for 20 cans versus the one lobster.
Additionally, mixed costs were common within Kroger as well. At first, Kroger owned all the semi-trucks that delivered inventory to
Management salaries were fixed, but other salaries were variable. Initially, schedules were created based upon sales. After persuasion, they moved to units sold as a factor for scheduling. Primarily, my argument was one store may sell a lobster and another store 20 cans of tuna for same $20. Clearly, there is more work involved in completing the sale for 20 cans versus the one lobster.
Additionally, mixed costs were common within Kroger as well. At first, Kroger owned all the semi-trucks that delivered inventory to