CASE ANALYSIS OF: ASR Electronics Case study

1. Introduction
2. Identify Problematic Scenario
3. SWOT Analysis
4. Alternative Courses of Actions
5. Conclusion and Recommendation

ASR Electronics is a small eBay virtual store. One of its popular digital cameras sells an average of about 10 units per day, but the demand is quite variable. On some days, it may be as low as zero or may spike up about 20 units. Exhibit 12.14 shows some historical sales figures over a 10-week period. The owner of the business, Anita, is unsure of how to manage her inventory. She has been ordering the equivalent of one weeks average demand (70 units) from the manufacturer, which arrives via FedEx every Monday morning.

However, she has observed that on many days stockouts occur, and she must contact the customers and tell them that their shipments will be delayed from their promised delivery dates. This is causing some negative feedback on her eBay site, and she is becoming quite concerned. The cameras cost her $150 and her order costs are estimated to be $25 per order. She uses a 20% carrying cost rate. As the owner of small business, she needs to control her costs and does not want to maintain too much unnecessary inventory.

Exhibit 12.14

	Week 1	Week 2	Week 3	Week 4	Week 5	Week 6	Week 7	Week 8	Week 9	Week 10
Monday	10	8	8	0	8	2	11	12	11	5
Tuesday	8	5	5	10	10	6	16	2	13	12
Wednesday	20	8	17	7	11	11	13	17	19	17
Thursday	16	16	14	10	12	3	13	15	11	7
Friday	8	7	3	4	5	15	9	14	13	15
Saturday	14	8	9	13	11	12	9	6	8	10
Sunday	6	17	7	4	7	13	13	17	5	0
Weekly Total	82	69	63	48	64	62	84	83	80	66
Daily Average	11.71	9.86	9.0	6.86	9.14	8.86	12	11.66	11.43	9.43