Essay on Case 10 Happy Chips

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Performance Control at Happy Chips Incorporated

Table of Contents

Abstract…………………………………………………………………………………………....3
Performance Control at Happy Chips Incorporated……………..…………………………….4 – 7
Happy Chips Segment Profitability Analysis……………………………………………………..8
Happy Chips Income Statement and Annual Logistics Cost by Segment….……………………..9
References………………………………………………………………………………………..10

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Abstract

The director of logistics at Happy Chips Incorporated had recently circulated a letter that came from the only mass merchandiser, Buy 4 Less, complaining of poor performance. Buy 4 Less is looking for Happy Chips to increase deliveries by one per …show more content…
The last request from Buy 4 Less is for Happy Chips to install an automated order inquiry system to increase customer responsiveness costing $10,000, and let us not forget about the extra labeling fee that will be incurred on the extra delivery per week. As you can see by the segment profit analysis and the information presented above goes against the manager of marketing idea that Buy 4 Less is clearly Happy Chips most important customer, and that the company should immediately implement the suggested changes (Bowersox, Closs, and Cooper, 2010). As matter of fact they are undoubtedly the worst customer, costing Happy Chips over $875 a year. Furthermore, Happy Chips should not accept the requirements that have been presented by Buy 4 Less as it will ultimately lose the company even more money than it currently is. This goes right along with the ideas of the director of manufacturing who believed that the additional manufacturing cost required to meet Buy 4 Less’s requirements was to high (Bowersox, Closs, and Cooper, 2010). By just dropping Buy 4 Less as a retailer all together Happy Chips will immediately increase profits and can use the extra units to slowly attempting to expand again and start reaching a little further out of the Detroit metropolitan area. Happy Chips could put all of Buy 4 Less units into the most profitable segment, the grocery segment, which will make the sales force happy, as
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