Case 1.1 Kiddieland and the Super Gym

Elizabeth Schwarz

SCLT 2362

Case 1: KiddieLand Case Study

Problem Scenario

The problem we are faced with in this case study is the size of cost of the SuperGym product in comparison to KiddieLand’s other products. There is also a lack of communication between distributers of KiddieLand, the sales people. This study gives many options for the distribution of the product with cost-effective shipping alternatives and help with the profit margins.

Question 1

List and discuss the advantages and disadvantages of 

purchasing a two-wheeler trailer for each store to use for delivering

Super Gyms.

Advantages:

* Trailer can have multi uses when not distributing Super Gym products.

* Investment wise, in the long run owning a trailer will eventually pay for itself when cutting distribution middle-man costs.

Disadvantages:

* Costs of maintaining the trailer can be high (parking, license, insurance, typical maintenance)

* Potential margin loss from above expenses (especially if the product is not a successful seller like predicted)

Questions 2

List and discuss the advantages and disadvantages of having

local trucking companies deliver the Super Gym from the retail

stores to the customers.

Advantages:

* Usually low cost for customers that live close to store.

* Investment wise, no upfront expenses (like buying a trailer)

Disadvantages:

* Reduced profit margin

* Less delivery availability

* Cost of gas can affect the cost of this service, which fluctuates a lot.

Question 3

List and discuss the advantages and disadvantages of stocking

Super Gyms at the distribution centers, and then having the trucks

that make deliveries from the distribution centers to retail stores

also make deliveries of Super Gyms to individual customer.

Advantages:

* Transportation costs are reduced.

* Less warehouse space accumulated.

Disadvantages:

* Cost of inventory at the distribution center will rise....