Arome Bakery Case Questions

1. What are the difficulties and challenges faced by a store manager when placing orders for bakery products? What are some of the factors a store manager has to take into consideration during the decision process?

2. Using the historical sales data, identify how much the store manager should order.

3. Should the order quantity decision be made at the corporate level or at the store level? What are the advantages of each alternative?

4. Currently a 5% product return rate is given to store managers as a general guideline. What other elements should be included and considered when evaluating the performance of store managers?

5. What are some ways to potentially improve the sales performance of the stores? Are there any suggestions to improve the current transshipment among stores and make it a more attractive and systematic proposition for store managers?

6. Due to the current Covid19 situation, the production cost increased by 25% since the ingredients are difficult to procure from the vendors. How does this situation affect the ordering policy for a store manager?

7. During the Covid19 situation, each county started a county-level food bank program to provide food to those who need. As part of this program, the county purchases food from local stores. Hence, the program also supports the local business. An Arome Bakery store manager in a county has the option to participate into that county's food bank program by selling only unsold items to the county instead of returning them to the central factory. The pricing of these unsold items is up to the store managers. Considering that the production cost is 25% during Covid19, how can a store manager use the option to participate into the food bank program in order to both (i) support the county's social efforts, and (ii) make sure that the inventory policy is not affected by Covid19 (i.e., making the inventory management policy during Covid19 same as that during pre-Covid19)?