Club Français Du Vin Case Study

Operations Management

Club Français du Vin Case study

Inventory Management

“The Club Français du Vin” case study

This case study discusses ordering and forecasting process of the wine company Club Français du Vin. As the name suggests, this is a French company that offers French wines to the consumers trough catalog offers. The main catalog is the Etiquette, which includes a selection of 30 to 40 wines that the clients can then choose and order by mail, phone, fax or by internet. The members also receive other two leaflets, La Selection (shows three recommendations for the season) and La Cave (consists of a list of wines and corresponding prices, that are available also – this are mainly leftovers from the previous season and are heavily discounted).

The company has been having problems on the forecasting and ordering process. In fact, for the catalog of 2004 they ordered a quantity of 10000 bottles of wine when there was just an actual demand of 1704 for that catalog. As we can see this creates a huge cost for the company, since that to be able to sell the remaining quantities they had to sell with a big discount losing the margin that the others provided.

With this report we pretend to analyze the actual impact of mismatches between the forecasted demand and the actual demand in the company, and to provide some recommendations to improve the performance in the forecasting process as well as performance in general.

We are going to start firstly by setting our main assumptions and then we will enter in more detail into the analysis of the case study itself.

Assumptions:

* We assumed that both Rosè and panache wines are in between white and red, this means that in terms of time in warehouse and salvage value they get the average between the white and red;

* We are assuming that all bottles that can’t be sold in the appropriate season can then be sold in the next but at a discount;

* We also assume that the gross margin doesn’t hold the...