In February 2018, Kentucky Fried Chicken (KFC) was forced to close many of its 900 UK branches due to supply chain disruption. In a press release, the fast-food giant stated, “We've brought a new delivery partner onboard, but they've had a couple of teething problems - getting a fresh chicken out to 900 restaurants across the country is pretty complex!” By changing their delivery partner, approximately 750 KFC outlets across the UK faced delays in receiving their daily delivery of fresh chicken, meaning their restaurants could not supply customers and ultimately had to close. At the time, many thought the giant could lose up to £ 1 million daily.

Could KFC have done more to ensure their supplier was suitable for the job? The thought is that multiple supplier contracts could have spread KFC could have avoided the weight of the mammoth delivery task and a crisis like this. Another issue was that their supplier only had one distribution spot instead of multiple, which would have been able to service the outlets much more manageable.

1. There is always a cost attached or incurred at the different stages of inventory, at the acquisition stage, holding stage and even when inventory shortages are experienced. Discuss in detail one type of inventory cost incurred by KFC as a result of their supply chain disruption?

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In the context of the supply chain disruption faced by KFC in February 2018 one notable type of inventory cost incurred by the company is holding cost... View the full answer