Group 2
June 15, 2014
Group 2
June 15, 2014
Prepared for: Professor Kenneth Dymock
Prepared by: Kehinde Okitika, Babatunde Ojofeitimi, Ayodele Motunrayo, Apurva Krishna Tiwari, Shima Kar
Prepared for: Professor Kenneth Dymock
Prepared by: Kehinde Okitika, Babatunde Ojofeitimi, Ayodele Motunrayo, Apurva Krishna Tiwari, Shima Kar
Assignment 1: Dream Beauty Case
SCM 510
Assignment 1: Dream Beauty Case
SCM 510

Table of Contents

Page number 1. Description of Current State - - - - - - - - - - - - - - - - - - - - 2 2. pROBLEM STATEMENT - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 3 3. ANALYSIS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4
Cost Allocation and Profitability Analysis- - - - - - - - - - - - - - - 5
Analysis of alternatives - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6
Cost and Profitability Analysis for C-stores- - - - - - - - - - - - - - 9 4. CONCLUSION AND SELECTION OF FINAL ALTERNATIVES - - - -12 5. OTHER COMMENTS- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -13

Description of Current State:

Dream Beauty (DB) Company, a beauty product manufacturer, has three channels throughout US and they are retail stores, convenience stores and mass merchants. DB consider them as individual profit centre. The company’s total yearly sales is $130,000,000 upon which each channels are contributing in different ratios which are - retail stores 50%, convenience stores % and mass merchants 40%. The convenience stores has 13 different stores which are called in this case “C-Store” in different cities.

DB has an invoice terms of 30 days credit facilities for its three channels.