Sandusky Winery has been a major winery in the Ohio area for over 75 years and distributes many different types of wines, champagnes and sparkling drinks. “Sandusky logistics group prides itself on its on-time delivery record and a high order fulfillment rate of 98.7%” (pg. 170).
Sandusky Winery has had issues with an overstock of product and their inventory was a mess.
This inventory mess was caused by many factors, one of which being producing more product then they were selling. The product sits in storage and loses the company money as they produced the product, but didn’t sell it, so their labor expenses are not paid off by selling it.
Another issue is holding onto promotional products that sit in storage and take up space. The
promotional …show more content…
At most, a company should hold promotional products for a week after the event for semimetal value, but after that they should be taken away.
When calculating total inventory cost, Sandusky Winery needs to not only count for the product that is moving, but they need to account for the product that is sitting there and aging.
The cost for storage and maintenance will eventually add up as the more months go by without the product moving, the more the company will have to spend on storage. The company will …show more content…
Companies would rather save old or returned products and mark them down as it is better to sell a product for 25-75 percent off rather than writing it off and not getting any money for it.
Sandusky Winery used their “earn and turn concept, which captures the earnings margin ratio multiplied by inventory turn” (pg. 171). This has not helped Sandusky as it hasn’t helped determine what product sell and what doesn’t. I use as basic system of inventory to determine our best selling items and determine out inventory at my job. We evaluate product for 3 week intervals and if we sell 1000 units over our projected sales in that 3-week time then the product stays in circulation. If the product sells 100-200 units under its projected amount, then it drops
10-15 percent in price and continues to be evaluated. If the product sells only half (500 units) of its projected amount, then it drops 50-75 percent in prince. Finally, if the product doesn’t recover and drops under 400 units then it will be sold until it is out, then it will be discontinued. Many companies, and Sandusky should invest in it as well, use mobile devices such as
Sandusky Winery has had issues with an overstock of product and their inventory was a mess.
This inventory mess was caused by many factors, one of which being producing more product then they were selling. The product sits in storage and loses the company money as they produced the product, but didn’t sell it, so their labor expenses are not paid off by selling it.
Another issue is holding onto promotional products that sit in storage and take up space. The
promotional …show more content…
At most, a company should hold promotional products for a week after the event for semimetal value, but after that they should be taken away.
When calculating total inventory cost, Sandusky Winery needs to not only count for the product that is moving, but they need to account for the product that is sitting there and aging.
The cost for storage and maintenance will eventually add up as the more months go by without the product moving, the more the company will have to spend on storage. The company will …show more content…
Companies would rather save old or returned products and mark them down as it is better to sell a product for 25-75 percent off rather than writing it off and not getting any money for it.
Sandusky Winery used their “earn and turn concept, which captures the earnings margin ratio multiplied by inventory turn” (pg. 171). This has not helped Sandusky as it hasn’t helped determine what product sell and what doesn’t. I use as basic system of inventory to determine our best selling items and determine out inventory at my job. We evaluate product for 3 week intervals and if we sell 1000 units over our projected sales in that 3-week time then the product stays in circulation. If the product sells 100-200 units under its projected amount, then it drops
10-15 percent in price and continues to be evaluated. If the product sells only half (500 units) of its projected amount, then it drops 50-75 percent in prince. Finally, if the product doesn’t recover and drops under 400 units then it will be sold until it is out, then it will be discontinued. Many companies, and Sandusky should invest in it as well, use mobile devices such as