Walmart Case Essay

Submitted By nowaczyk91
Words: 364
Pages: 2

Group 3
Connor Nowaczyk
Evan Spreng
Walmart Case Synopsis

The first problem from the case was that Walmart’s seafood business was growing at 25% per year while their supply was diminishing. Continuity of supply was the greatest long-term issue facing Walmart’s seafood business. Walmart adopted a new strategy in which the goal was to transition to selling 100 percent MSC certified wild-caught salmon. Achieving the goal of 100% of suppliers being MSC certified was not an easy task because low margins due to shipping and warehousing costs made it difficult for suppliers to become MSC certified. Another problem Walmart faced was one, which involved volatile pricing fluctuations for wild salmon depending on the length of the season. Potential solutions to these problems could be shifting from JIT inventory to Economic Order Quantity. Doing so would allow for suppliers to keep lower inventory levels in U.S. frozen storages facilities thus benefiting MSC certified suppliers. Furthermore, Walmart could shift sourcing to farm raised salmon rather than wild salmon. This would protect Walmart from the risk of volatile pricing during varying wild salmon seasons and the farm-raised salmon are better suited for EOQ as any quantity can be ordered year round. The frozen salmon also offer a $0.45 increase in margins compared to wild salmon as shown in Figure 1. Question: 1) What is your ideal ratio of wild salmon and farm raised salmon sold in stores that would result in the highest net profit. 2) Do you agree