GROUP 3

PRELIM

CASE STUDY

SUBMITTED TO:

MR. O LAND NWOKE

SUBMITTED BY:

DELA RIARTE, BENEDICK

FLORENDO, PORCELAIN

MOJICA, JEREMY

PARDE, JAYDHI

SAN JUAN, JULIA MAE

I. Statement of the Problem

Warehouse congestion as the products are not being sold and there have
been no sales, and the production personnel have threatened to stop
production as a result of the failure of the logistics department to pull out the
piled-up stock of the production department. The manager is also facing a
problem with the shelf life of the products.

II. Causes of the Problem

Due to delays in deliveries, the schedule is no longer in line. There is also a

lack of warehouse capacity for the production. The product has a three (3)
month shelf-life, meaning it will expire after 3 months. In the third (3) week,
the company experienced congestion in the warehouse due to non-pull-out of
stocks by the Finished Goods Warehouse. The quarantine is causing delays
in deliveries, and there are still only a few approved deliveries. There is a
decrease in sales.

III. Alternative Solutions

AFG can increase sales by lowering the real selling price. They offer
discounts, promotions, and freebies, among other things. It will undoubtedly
bring in more customers.

 Pros: It will solve the problem of insufficient storage. It will reduce the
amount of products that must be stored, allowing them to continue production.

 Cons: It's possible that sales will fall short of expectations. By lowering
pricing and offering exclusive offers

AFG can deliver products right to clients or perform so-called cross docking.
It is more efficient than storing the products.

 Pros: It will be more efficient because they would not have to worry about
product storage. There will be no storage time, and durations will be used more
 efficiently. It will less their problem with the return products that did not delivery
within 3 months.

 Cons: Customers will incur additional expenses. But there will be less
trouble and no waiting time.

AFG can do the scheduling. It is necessary to have this policy because the
production of products will be more efficient and the outputs of the company
will be accurate, and the company will not be affected by having a lockdown in
an area.

 Pros: it will not cause overproduction and more space on another order.
The operation will be more organized and the production will be smooth.

 Cons: limited output can affect the sales of the company. It will be a lot of
adjustments for all, it will be another planning and executions.

AFG can do better communication it is the best solution to achieved goals.

Having good communication between management and logistics can help the
company to adjust to this pandemic.

 Pros: the company will also adjust for this plan. There will be a better
operation and less mistakes and less misunderstanding.

 Cons: Slow adapting for the changes.

AFG can do advertising through the use of social media platforms, such as
Facebook, Instagram, and online shopping.  They can endorse their products,
so more people can reach them through the products. A lot of people are using
social media to buy products and explore the market. 

 Pros: the sales will increase and the products will be known. It gives more
opportunities, maybe resellers, partnerships, and investments.

 Cons: there will be an issue with a shortage for the company.

IV. Recommendation and Justification

It is highly recommended to sell the products at a discounted or lower price.
This way, the products may be sold before their shelf-life, and it can decrease
the warehouse storage issue. AFG, however, should keep in mind the loss (or
breakeven) they will incur from the dropping of the product’s price. But the
thing is, it is better to sell the products at a lower price than to be a waste.
Prevention is better than no action. It is recommended rather than losing
revenue because of the spoilage of the product. Each employee should be in
line and on the same page. It is important to have good communication in
terms of production, scheduling, and volume of products. Another
recommended action would be to deliver the product directly to the
customers. This would incur shipping and delivery costs, but it would
generate sales and alleviate the warehousing problem.