Exotic Adventure

Greaves Brewery: Bottle Replenishment

Case Synopsis

Greaves Brewery is a growing beer operation based out of Trinidad. The purchasing manager for the brewery, Alex Benson, finds himself struggling in finding a balance between ordering enough bottles to support sales; yet minimizing over ordering to avoid issues associated with growth decelerating trend from an off year, continued impact from government excise tax, tourism, and growth of exports particularly the USA. (Erskine, Leenders, & Piper, 2004)

In addition to previously mentioned concerns ordering the right number of bottles would have to take into consideration the impact of storage limitations, erratic sales, and a looming bottle design change that once introduced will make the inventory of all bottles in storage regardless of new or used totally obsolete. The purchasing manager wishes to be sure to attain sufficient bottles to meet this year’s sales, yet needs to minimize year-end inventories to keep the business profitable, maintain satisfied customers, and minimize losses. (Erskine et al., 2004)

State the Assignment Question

Analyze how many bottles to purchase and the forecast of beer sales for the next twelve months?

Case Analysis

In determining how many bottles to purchase, the forecast of beer sales for the next twelve years and to estimate the bottle replenishment needs required a number of considerations to be made by Benson. Firstly, the unpredictability of sales that occurred in the previous years. In February 2004 sales reached the highest level in the company’s history. However in 2003 the sales increase had been well below the trend average. This decline was believed to be directly related to the 2003 slump and the increase in government taxes on beer. While Benson was reasonably certain that the government would not levy additional taxes during 2005, but wondered whether the full effect of the tax had been reflected in 2003 sales. This concern had great bearing on the...