Supply Chain Management Project

Topics: Inventory, Economic order quantity, Reorder point Pages: 12 (4200 words) Published: June 20, 2013
Cherry de Pon: Short and Long Term
Solutions to the Ordering Process

Jake Effertz
Tuyen Do
Christy Feng

Central Washington University

Supply Chain Strategy
Professor Kun Liao
March 11, 2013
Table of Contents
Abstract…………………………………………………………………………………... 3 Company Background…………………………………………………………………… 4 Current Issue……………………………………………………………………………... 5 Supplier Selection………………………………………………………………………... 6 Short-term Solution…………………………………………………………………….… 7 Excess Inventory Solution……………………………………………………………… 10 Long-term Solution……………………………………………………………………... 12 Conclusion…………………………………………………………………………….... 16 References………………………………………………………………………………. 17

Abstract
The purpose of this paper is to address the current issue of the effectiveness of Cherry de Pon’s ordering process and how it affects their day to day operations. During the research process, there were several obstacles in the gather of data and information due to the availability or access of that information. There are many solutions to addressing this particular issue, but the following paper will explore one short and one long term solution. The short term solution develops proof and reason for how the use of the EOQ method can provide a cost effective solution for Cherry de Pon’s current issue. As for a long term solution, Cherry de Pon needs to look at the tools that they use to help their operations and improve their business. By implementing a newer, more effective Management Information System, they will be able to properly identify the demand of their products at each location. With these two solutions, Cherry de Pon will be able to solve the problems that occur because of their current ordering and inventory management process.

Company Background
Cherry de Pon is a self-serve frozen yogurt bar that allows you to create a variety of frozen yogurt and topping combinations to satisfy your tastes. Their product flavors range from more Asian inspired flavors like taro, lychee, and guava, to the more commonly seen western flavors like vanilla, chocolate, and strawberry. They also provide smoothies, bubble tea, and other hot drinks that are focused around Asian and Americanized flavors. Cherry de Pon was founded in 2011 and has rapidly grown in just a few years. From its opening until now, it has expanded to a total of five stores in Washington, with locations in Renton, Auburn, Everett, Lynnwood, Kirkland, and a franchise in Houston, Texas. Two more locations are planned to open this coming summer in Snoqualmie and Covington. (Cherry de Pon, 2013) The table below is a consolidation of invoices that outline Cherry de Pon’s current selection of suppliers and the products they order from them. Supplier| Freight Cost| Products| Order Frequency| Other Requirements| Sysco| $5 | Yogurt, Milk, Fresh Fruits, and Dry Toppings| Every Two Weeks| Order must exceed $1800.| Harbor| $11.95 | Yogurt, Milk and Fresh Fruits| -| -|

Shin Sheng Food, Inc.| Free| Bubble Tea (Powder, Sugar and Syrup), Fresh Fruit and Ice Cream (smoothies)| Every Four Months| -| Hanmi, Inc.| Free| Toppings and Yogurt (Asian Yogurt Flavors)| 1-2 Times a Month| -| TransCold Distributing, Inc (Rainbow)| Free| Spoons, Sample Cups and Yogurt| Every Two Months| -| Solo| Free| Cups for Yogurt, Bubble Tea and etc..| -| Ordered in 15000ct for Label on Cups| The current organizational structure of Cherry de Pon consists of three owners, one is the Manager of the whole company, another is the Assistant Manager and the last owner acts a Supply Manager. They also have a Technology Manager that takes care of any technical issues that may occur at any of the stores. Each store also has a team Leader and 5 – 10 team staff members depending on the season. (T. Do, personal communication, January 9, 2013) Below is a table of the sales revenue at Cherry de Pon for the average annual sales and the average daily sales for each season. The information below was...

References: Best Prices on Self Serve Frozen Yogurt Point of Sale Software. (n.d.). Point of Sale Software for Retail and Restaurants by Cafe Cartel Systems, Inc.. Retrieved February 25, 2013, from http://www.cafecartel.com/pricing-and-licensing/frozen-yogurt-self-serve.html
CCS Point of Sale - CNET Download.com. (2010, June 27). Free software downloads and software reviews - CNET Download.com. Retrieved February 26, 2013, from http://download.cnet.com/CCS-Point-of-Sale/3000-2064_4-10535074.html
Carden, C. (2012, November 16). Does Anyone Use The HALO POS System?.ChefTalk.com - Cooking forums and reviews for chefs and food lovers. Retrieved March 1, 2013, from http://www.cheftalk.com/t/63886/does-anyone-use-the-halo-pos-system
Cherry De Pon | NonFat Yogurt, Smoothies & Bubble Tea. (n.d.). Cherry De Pon | NonFat Yogurt, Smoothies & Bubble Tea. Retrieved February 25, 2013, from http://cherrydepon.com/
Electric Rate Schedules. (n.d.). Puget Sound Energy. Retrieved February 28, 2013, from http://pse.com/aboutpse/Rates/Pages/Electric-Rate-Schedules.aspx?Schedule_x0020_Type=Rate%20and%20Adjusting%20Schedules
Global Industries. (n.d.). Turbo Air New Maximum Series. Retrieved February 28, 2013, from www.globalindustrial.com/p/foodservice/refrigerators-freezers
Sysco Supplier Partnerships. (n.d.).Sysco. Retrieved February 26, 2013, from http://www.sysco.com/supplier-partnerships.html
TransCold Distribution Ltd & Inc. (n.d.).TransCold Distribution Ltd & Inc. Retrieved February 26, 2013, from http://transcold.com/about.php
Yogurt & Ice Cream. (n.d.). Real Restaurant Results | Vivonet, Secure Internet Restaurant POS. Retrieved February 20, 2013, from http://www.vivonet.com/halo-pos/halo-pos-for-frozen-yogurt-ice-cream/
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