o Barilla’s own sales incentives drive erratic trends in purchasing large quantities (driven specifically by bulk discount incentives) • Issue: Inventory limitations and distribution centers and retailers, which are driven by: o Physical space limitations (shelf and floor space) o Competition’s need for space, incentives to retailers and distributors, etc. o Built ideally for steady-state demand (one shelf space for one product at a set volume) • Issue: Long lead time for
1. What are the reasons for the increase in variability in Barilla’s supply chain? Ans: Currently Barilla’s supply chain is facing various problems ranging from complete stock outs of products when needed, poor communication within the organization, additional emphasis on promotional activities, increased lead time. The main reasons for increase in variability in Barilla’s supply chain are listed below: 1. Price Variations: Barilla’s Sales strategy was totally dependent on the promotions to market the product.
Growing global demand for energy coupled with tight worldwide supply of crude and hydro-carbon products will likely mean price volatility going forward, despite the current recession of economy. At the same time, the industry faces the rapid decline of mature assets. Authorities estimate that more than 80% of the world’s
There are several underlying assumptions to the aggregate expenditure model established by Keynes. Keynes described real gross domestic product formulaically as: GDP = C + I + G + NX In this formula, GDP (planned spending, or aggregate expenditures) equals the sum of C (planned consumption), I (planned investment), G (government spending), and NX (net exports). Consumption, government spending, and exchange through imports and exports always occur, but planned investment would vary and could not always be assumed to occur. Keynes noted that companies upon completing inventories would find that they had a larger amount of unsold goods than expected, and would attribute this to sales in the economy not being strong enough to support the
1. What caused the difficulties that the JITD program was created to solve? The problems that JITD intended to solve: ● Demand fluctuation: Barilla suffered increasing operational efficiencies and cost penalties that resulted from large week to week variations in its distributors’ order patterns. According to the Exhibit 12 , the demand variability was huge so it was very difficult for the whole supply chain to forecast the demand and order accordingly. ● Furthermore, the production line of Barilla had a long setup/change process and was highly automated as well.
By doing so, a corporation may reduce commodity price affecting its share price. J&L Railroad had most of its revenue fixed for a long term, because it was industry practice for railroads to enter into long-term fixed-price contracts with their freight customers. On the other hand, fuel cost was a large cost item for J&L, and fuel prices have high volatility. Price competition in the railroad industry was fierce that railroads could not increase freight prices based on fuel price increase. Thus, J&L’s operating margin was exposed to the volatility of fuel prices.
The Output of the Firm As the demand for labour is a derived demand it is significantly dependant on the level of a firms output. There are many factors that influence the level of a firms output they are: o The general economic conditions, o The pattern of consumer demand o The demand for individual firm’s output. • General Economic conditions Aggregate demand: It refers to the total demand for goods and services within the economy. Components of aggregate demand are consumption; investment; government spending; and net exports. High rates of economic growth bring about an increase in the aggregate demand and decrease in the unemployment rate and vice versa.
Whirlpool’s quest for global leadership 1. Do a SWOT Analysis of Whirlpool at the time of the case. Strengths * Diverse product portfolio * Strong force in regional markets * Broad Global Presence * Global market leader | Weaknesses * Inadequacy of pricing strategy * Significant proportion of operations in maturing markets * Innovation without due consideration for cost and salability | Opportunities * Increase market share of periphery products * Online retailing/advertising platform in advanced economies * Growth potential in Latin American and Asian markets | Threats * Raw material cost increases * Restructuring difficulties in Europe * Declining demand in North America and Europe | 2. What are the major strategic factors facing Whirlpool? Manufacturing costs high (75% of operating costs), scale sensitive.
By being informed and setting boundaries, making a list of questions with key points regarding the vehicle, and doing a little research can make purchasing a used vehicle can be less daunting and more exhilarating. First, it is wise to think about what you want your limits to be throughout you decision making process. Edur brings to attention some questions to consider: the size of vehicle is important, how many passengers do you need to accommodate? Do you need a vehicle for long commutes or short trips (p.45)? A good idea is to keep in mind the gas mileage of a vehicle, because if it is not efficient you could end up paying more in the long run.
Again, we are told about the variation in the cost of components, particularly of imported steel and IT. Steel, being a main commodity, will undergo rapid fluctuations in price which are not always predictable. Any imported items will be subject to fluctuations in price caused by exchange rate changes which are again difficult to predict. In addition, the rising reject rate will effectively increase the costs of production, which again will limit the usefulness of the break-even data. FIF produces lots of products and so it will be difficult to monitor them all using break-even analysis.