Answer questions 1 & 2 Analyze the information presented in the case and make a
ID: 336620 • Letter: A
Question
Answer questions 1 & 2
Analyze the information presented in the case and make a decision on how to reduce costs per the problem posed. Support your decision with clear rationale. (400 words)
( MasterTag CASE Nicole Foster, Grand Valley State University When MasterTag was founded in 1949, its founder, Ludwig Schmidt, set out to be a manufacturer of plastic fishing bobbers. Then, in 1950, Mr. Schmidt was approached by a local greenhouse owner and was asked if he could produce a line of horticultural labels for plants. At the time, these labels were made of wood. Mr. Schmidt adapted his machines to produce these labels and has been manufacturing the plastic "tags" for plants ever since. Over the years, the labels have increased in quality and now feature full-color pictures of the plants along with the name and planting and care instructions. that will be needed is difficult to predict due to possible crop failures and the introduction of new items. To avoid a shortage of tags, seed companies order and ship a large quantity of tags to their customers. Tags are ordered early to allow for the time needed to incorporate the tags with the seeds. Seed companies usually end up each year with huge numbers of leftover tags. In fact, Master Tag's largest customers often end up with millions of leftover tags. Many of MasterTag's largest customers are seed companies that sell the seeds to commercial growers. The large seed companies typi- cally place one or two large orders with Master Tag at the beginning of the growing season. The seed companies then sell their seeds and the labels to their customers who grow the plants and sell them to the end consumer. For various reasons, the seed companies do not like ordering tags, but do so because their customers demand labels with their seeds. However, there are several problems with this ordering process. The main issue stems from the fact that the exact quantities of tags When MasterTag's management became aware of all the unused labels and unhappy customers, they decided they must come up with a better solution for achieving a match between supply and demand of the tags. One possible solution would be to make an initial, fairly large batch, which would be produced and shipped directly to the growers instead of the seed companies, as is now being done. Later, when the grower results became available, a second batch would be produced using information from growers on how many additional tags are needed. The second batch would then be made and shipped to the growers. (See figure for Before and After.) Continued Before er MasterTag sends tags to seed companies. Seed companies send plants without tags to growers. Seed companies send plants and tags to growers. MasterTag sends a large batch of tags to growers. Growers receive plants from seed companies and tags from MasterTag. Growers receive plants and tags from seed companies. MasterTag sends additional tags to growers as needed. Growers receive additional tags from MasterTag Plants with tags are shipped to retailers. Plants with tags are shipped to retailers. End customers buy plants with tags. End customers buy plants with tags. Questions Explain the key benefit of the revised approach, and the reason for the benefit 2. MasterTag has not yet decided to implement this plan. List the pros and cons you think should be considered. 1.Explanation / Answer
A-The benefit of the revised approach are that
1-demand and supply can be matched by analysis how many plants are left in the grower stage and if needed more the same can be supplied
2-Reduce losses - unnecessary production of tags
3-Reduces cost- reducing unnecessary production of tags reduces cost of production of tags
4-Proper planning and proper utlilization of resources by producing only required no. of tags
5- Increases supply chain efficiency
6- Reduces stocking cost - reducing over production thus reducing stocking cost like wareshousing cost maintainance cost etc
B- Pros and cons of the revised plan
Pros
1- Reduces cost
2-Reduces unnecessary wastage of recources
3-Reduces stocking of product
4-reduce losses
Cons
1- It may be a possibility that there is no timely additional production of tags when grower need them
2-Not timely delievery of tags to the growers if needed more
3-It may increase the timeline of the project
4-Shipping tags twice for the same project.
C) Analyze the information presented in the case and make a decision on how to reduce costs per the problem posed. Support your decision with clear rationale
By implementing the second strategy the cost will be reduced by matching the demand and supply of tags thereby reducing the unnecessary production of tags but there will be an additional cost of shipping the tags twice to the seed company for one project cycle. Thus to reduce this planning and forecating should be done on the past data with the help of many techniques like moving average, exponential or time series forecasting.
Moreover reducing in cost can be done by fitting machines that can provide adequate light , temp, oxygen etc in the grower farm so as to reduce the no. of losses of seeds. This would be the one time investment that would surely reduce the cost for the subsequent project cycle.