SUPPLY CHAIN TASK 2
Cheri Jill Upshaw
August 12, 2014
Task two is the second task that applies the results of the Marketplace Simulation. In my simulation I named the company Airborne. I used a very conservative approach in all four quarters. The company did not have to borrow any money or pay any carrying charges for inventory. I did however, lose sales in all quarters due to higher than expected sales and product demand. Loss of sales can cause ill will and can cause you to lose customers permanently. However, the increased demand can also create a sort of frenzy to get the product that is not available such as with Apple and the first I phones. In my simulation, I chose Travelers and Mercedes to focus on. Several times the company ranked high with Workhorse as I continued to focus on Travelers and Mercedes.
Each quarter of the simulation, I adjusted my decisions based on what
had sold the previous quarter, how much money I had to work with , what other brands were doing and how their sales were doing. I focused on the smaller, high market segments and geographic markets in the middle of the cost/continuum. The company’s competitive posture was to build a specific market position and defend it while providing the most reliable product on
the market. When companies start out cheap, their reputation is that of building cheap products and that image is hard to shake. What is LG now used to be Gold Star. Customers like and buy LG but older customers that remember Gold Star would most likely walk away and not buy the product just because of that image. So image is very important. With that in mind I chose to target Mercedes and Traveler and build and design according to what the market research stated that each division preferred. I considered the market share. It is every company’s goal to be number one in market share and number one in profits. However, it is more important to make a profit and have a lesser market share. We were number 4 in market share with Workhorse and that was fine. We were selling a lot to Workhorse but they were not our target group. We did target Mercedes and we were number four. We did much better with Traveler in that we got number four in market share but we were number one in market demand. Number one in demand made the simulation decisions I made feel very good. I determined the products by starting out with one well built desktop and one well built laptop targeted each for Mercedes and Traveler and then one lesser built for each. Because Lightspeed did not sell as well as Light Traveler, I discontinued that brand without having any leftover inventory to carry. I lost 117 sales due to lack of inventory on the Light Traveler. Mathtop did very well and I lost 780 sales
due to lack of inventory. Travelite and Featherlite were about the same in number of sales and lost sales. However, in the fourth quarter, I tried to come up with a break away brand with the Lightening Rod and succeeded. I designed the fastest laptop with a sleek rugged design and loaded it up with travel features while maintaining a competitive price. The company produced 1,625 and the net demand was 3,177. We lost 2,095 sales but we gained the market demand. Based on those figures, I chose to double the manufacturing capacity. That should help the inventory issue without flooding the market and having to lower the prices or having any products leftover. The company should move forward with a number one design while maintaining a good financial foundation.
I really would not change the target markets if I had the chance to do
over. We did very well in the first year to come up with a product that was number one in demand with Traveler while maintaining a good sales record with Mercedes. I did not target Workforce but they did however buy a good volume of computers and gave good reviews. The plan is to continue to target Mercedes and Traveler while still building a good relation and sales record with...
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