Alpha Appliances, Inc. is a major distributor of household appliances. Its customer base consists of local retailers who stock a variety of products including appliances. Alpha purchases bulk of its products from China, Mexico, India, and Thailand. The business has been good. In past few months, Jay Adams, VP-Marketing has received numerous complaints from its customers that they have not been receiving supplies on time, costs have gone up, etc. Jaycalls a meeting of his sales manager Kathy Land, production manager Abraham King, and procurement manager Ashley Thompson. Jay Adams: Good morning ladies and gentlemen! How are you guys! Kathy, Abraham and Ashley all respond with a smile. Jay: Lately I have been receiving a lot of complaints from our customers and that worries me. Ashley: I am not aware of it! What are the complaints about? Jay: There are complaints such as our product prices have gone up, we are not able to deliver on time, and so on! Abraham: Are the complaints specific to a product, or across the board? Jay: Well, am not sure. We probably have problems with many of our products. The most serious problem however seems to be with our very popular ceiling fan model B23Y5. Ashley, are you aware of any issues either with this product or its supplier? Ashley: Well, we have buying this product from China with a company named Xanu Enterprises. They have recently raised prices, so we were forced to raise ours, in order to maintain our margins Jay: Abraham, do you think we can buy parts and assemble this fan in house? Abraham: Yes, we have the capability to do so Jay: Kathy, why do our customers complain about late deliveries? Do not we have a good idea of the future demand? Kathy: We do forecast as best we can. But, I guess sometimes we screw it up! If we do better job of forecasting, this problem can be minimized. Jay: Well, we have had good discussion of the situation. I am giving you guys one week of time to do your home work. Ashley, try to identify more reliable vendors; Abraham, estimate the cost if we do in-house production; and Kathy, you come up with a more reliable forecast. Kathy, Abraham and Ashley all nod their heads and the meeting is adjourned.
This question was answered on: Sep 21, 2023
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