- Northern Womans Wear

You are the Logistics Manager of Northern Womans Wear which is a small manufacturer of various products in Mississauga and produces 30 products that have gained a good success in Canadian and US markets. One of Northern successful products is an organic herbal soap that is highly demanded in and regularly shipped to Edmonton, Vancouver, Winnipeg, Montreal and Windsor. Facing such high market demand, Northern Womans Wear is considering expanding its soap production line, but currently will have to distribute its monthly production between these markets. As a result, Leafs shipping schedule is budgeted according to the following table:

Northern Womans Wear has requested quotes from nine trucking companies out of which four have been shortlisted for contract. The following shows the quotes received from the four trucking companies which are all in dollars per cwt:

Based on the production line expansion plans of the company, the sales department is finalizing long term sales contracts which will increase sales to Vancouver, Edmonton, Winnipeg and Montreal. The projected changes to the sales volumes are summarized in the following table:

Leafs VP-Finance (R. Bloor) has projected that the new sales prices offered to secure the above deals would reduce your allocated annual operation budget by $22,400. This means you will have a tighter budget to manage the transportation of products to these markets.

Case Questions:

1. Without considering the changes in production and sales, which one(s) of the transportation companies will you sign contract with for these four markets? Make sure you outline why you pick who and how many you will contract with
2. How would the new sales affect your shipping plans? (hint, need to find the new annual shipping volume- use the table and ratio to help you)
3. How would you adjust your costs to meet the future reduced budget you will have? Note, the dollar value of the budget reduction amount needs to be found. Outline the cost per lb challenge that is being requested to your budget.