SummaryKiddieLand is a retail store that deals with toys, and it is located in Midwest. The headquarters of KiddieLand is located at Chicago, which is also a distribution centre, while the second distribution centre is located in Columbus. Generally, KiddieLand has 70 stores located in six regions. The company sales a range of toys emphasising on brand name toys and KiddieLand brand. The company has numerous competitors, but the success of the company is attributed to aggressive pricing, comprehensive product line and self-service. The company is intending to introduce Super Gym Outdoor Children’s Exercise Centre valued at $715, packed in three boxes with a weight of $450 pounds; this will be heavier and expensive toy that they will sale.
Moreover, the company was profitable that year and the employees will have additional bonuses, this also shows that the market share of the company is improving. Thus, the new toy was a major concern to the organisation and management team came together to strategise on the appropriate approach to sell and deliver the product. Since, the toy is heavy, the managers looked for alternatives to fulfil delivery requirements. One of the options was for Super Gym to deliver the toy to the customer address but was not possible because of requiring ten units by the manufacturer to deliver they toy.
KiddieLand had already committed to 400 Super Gym toys but the major problem was delivery. The management formulated five alternatives, which are purchasing a two-wheeler, utilise service of local trucking company, stocking the product at the two distribution centres and using the track to delivery, charge the consumer or negotiate with Super Gym manufacturer. They analysed these options.
The cost of a two-wheeler trailer was $2100 ($1800+$250+$50) but bumpers of most of new autos do not support trailers and this option is associated with numerous losses. The second option was using the trucking company that charges $38.21 per set within 25 miles with additional $1.50 per mile for distance of more than 25 miles. However, this option of charging the customer a flat rate of $40 was also analysed. In addition, this option was not viable because the truck used for delivery is large for the forth option.
The fifth option backfired because the manufacturer said that it was not possible to deliver the toy to the customer address directly since they require consignments of ten units. Answers to QuestionsAdvantages and disadvantages of purchasing two wheeled trailer for each storeAdvantagesThe company can ship the toys anytime they want or a customer wants. Additional income can be earned from delivery chargesThe trailer can be used to deliver other toys to the customer and also transport toys between the storesDisadvantagesThe two-wheeler trailer is expensive since the product has not been tried e. g.
the customers have not bought them or are not aware of the product. The company should place into consideration local authority regulations and provisions of two wheeler trailerAdvantages and disadvantage of having local trucking companies to deliver Super GymAdvantagesUsing trucking company is cheaper It does not require extensive capital since when a consumer purchase a product it is directly transported by the companyMany Super Gym toys can be transported in a single delivery