Case study: Ice House Toys
Essay from the year 2004 in the subject Business economics - Business Management, Corporate Governance, grade: 70% = 1,3, Edinburgh Napier University, 6 entries in the bibliography, language: English, abstract: Ice House Toys is a company which consists of five shops and one mail-order business. The mail-order operations are situated in a warehouse in Bristol. This building consists three floors, each 1200 square metres. Every year Ice House Toys send three catalogues with about 300 different toys and games, all manufactured in UK, Europe and the Far East. The major of this catalogues is the Christmas catalogue which is sent to 160,000 customers resulting in 22,600 orders with an average order value of £42. The winter and spring catalogues are sent to 90,000 customers. This results in 6,900 orders with an average order value of £23. The stock for the Christmas sales is ordered by the end of July and received in two phases. 75 percent arrives in the first week of October and filled the stock areas to capacity. The remaining orders come after the first 2,500 orders have been processed in the fourth week of November. In 1999, stock with a resale value of £1.1m was ordered. The mail-order operation is divided into three stages: recording, assembly and packing and dispatch. Robin Baker, the Managing Director of Ice House Toys, plans three main changes for the mail-order operation. Firstly, he will do an agreement with a company which sells upmarket children’s clothes. This will lead to 30,000 new names and addresses of customers. Secondly, Ice House Toys will spend further £18,000 on advertising because each £1,000 led to 190 additional orders in the past. And the last future change will be the newly created website. On this the user can find detailed description and photographs of each item. The ordering will be easier because you will have a virtual shopping basket and send your order online to the company. The user has not to print the descriptions and codes. In the trial period the customer’s average order value was £60. Ice House Toys think that five per cent of their existing users will use this service.
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1.1 General overview 1.2 Capacity constraints 1.3 Extension 1.4 Other methods 15 percent 16 9 Orders 30 maximum orders 4751 required staff 600 square metres 7.5 percent reduction Alternative purchasing policy amount of orders average order value changes Robin chase demand collectors Packing Dispatch company’s costs deliver within three Dispatch 1 staff dispatch policy expected orders find the website five-day week gross profit Ice House Toys increase capacity Internet inventory Just-In-Time in Ice Kanban Long-term capacity planning mail-order operation Management 2nd Edition means Ice House meet their dispatch number of staff Operations Management 2nd orders in 2000 Orders per week overcome capacity constraints overcome the capacity Overtime payment packing and dispatch planning and control policy 3.1 Just-In-Time purchasing policy 3.1 quantity discount Recording Stock collectors seven-day week smaller quantities space office walk space/staff square metres extra staff orders/h 22 Stock collectors Packing varying number virtual shopping warehouse space weekends