Case study J&J and Walmart

1.refael turns to Michelle and asks, "what order quantity do you recommend we use for this product? Remember, we only ship in case quantities."

2.Michelle reminds Rafael that two companies are looking for ways to streamline the flow of product through the supply chain.one way to do so would be to ship only in tier quantities. If each order to the store was for a single tier, then the tier could be created in J&J's warehouse. The tier would then be shipped to Walmart distribution center and immediately sent on from the distribution center to the supercenter. Rafael agrees that a tier quantity might help the rest of the supply chain, but he fears that would be costly to order one tier at a time for this supercenter. Are Rafael's concerns justified?

3.putting aside the issue of ordering a single tier (which requires some more information to come to a resolution), Rafael wanted to raise another issue with Michelle. Looking at figure 12.3, he points out that there is period of time when demand looks like it is 50 percent higher than the average, and other times when demand as is much is as 50 percent lower than the average. Given this variation in demand, he wonders if choosing a single order quantity (in case) is a reasonable strategy. Or should it adjust its order quantity throughout the year? Making adjustment to the order quantity would be a hassle, especially given the number of products it manages and the number of stores it has, but if it needs to do that so save on cost, it will.