1 / 18

Gupta Tea Co.

Gupta Tea Co. Amanda Miller Kent McKimmy Cole Hunstad Kevin Angell Chad Wellsted. Background. Tea company based in Dallas Texas First started growing selling tea Moved into food retail with increased competition Purchase grow and produce most of products. Background.

jessamine-french
Download Presentation

Gupta Tea Co.

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Gupta Tea Co. Amanda Miller Kent McKimmy Cole Hunstad Kevin Angell Chad Wellsted

  2. Background • Tea company based in Dallas Texas • First started growing selling tea • Moved into food retail with increased competition • Purchase grow and produce most of products

  3. Background • Four plants located throughout U.S.A • Five Consolidated Metropolitan Statistical Area (CMSA) • New York, St. Louis, Chicago, Miami, Los Angeles • Shipping warehouses in each CSMA for distribution

  4. Background • Four small plants with fixed design layout • Each plant has capacity of 6000 units • This years sales demand of 20000 • Four plants currently only producing 5000 units

  5. Background on Case • Increase in health tea food competition • Despite marketing efforts sales still declining • Underutilized/inefficient plants cause increased tea prices • Used Delphi method to consider next move

  6. Detail on case • Market analyst showed decrease in forecasted sales • Projected sales in 2 years of 15000 • Shut down one plant = 20000-5000=15000 keep prices competitive • Takes 2 years to officially close plant • CSMA’s have relative same decrease in sales • Which Plant to Close???

  7. Sales Forecast Data

  8. Shipping Cost Data

  9. Total Shipping Costs & Averages • Average Shipping costs= Total shipping costs(NY)+(STL)+(LA)+(CH)+(Miami)/5 • Total Shipping Costs for all demand = (45*3350)+(30*2650)+…. For each plant and CMSA

  10. Recommendation Using Average • Due to high ASC, shut down Plant 2 • What if we didn’t use average?

  11. Recommendations for Plants • Deeper analysis of shutting down plant two • Shipping costs at capacity of 5000

  12. Shut Down Plant 1? • Shutting down plant one yields highest shipping costs

  13. Shut Down Plant 3? • Shutting down plant three yields $393400 of shipping costs • Lower than shutting down plant one

  14. Shut Down Plant 4? • Higher than shutting down plant three • Lower than shutting down plant one • Shut down plant three not plant two

  15. What else should be considered? • Relationship between management and employees • Business climate • Labor and production quality • Location of suppliers

  16. New Consolidated Metropolitan Statistical Area • Shipping costs to new area • Total Population • Cost of living index • Average wage/income tax • Warehouse prices • Climate • Demographics

  17. Impact of New CMSA • If new Demand over 18000 open new plant • Reallocate supply from plants • Recalculate deeper analysis of shipping costs

  18. Questions? Quiz! • What plant should be shut down? • Which plant had the lowest average transportation costs? • What was a piece of data we could have used?

More Related