Chris Sugai owns Niner Bikes, a nine-year-old mountain bike company in Fort Collins, Colorado. With a price
Question:
But with such growth comes new hassles, especially on the supply chain end of things. Sugai has been depending on a third-party logistics provider to store and deliver his bikes, bur he thinks it may be time to bring the operation in-house. With 34 employees, the company should be able to handle the change, even though it will cost about $85,000 to buy the software, scanners, forklifts, and more that will be needed. Sugai might have to hire a few more employees to make the transition possible, but that should be very manageable for a company that is growing at such a rapid pace, and the up-front investment would probably pay for itself in no time. It would definitely make life more complicated, though.
1. What are the advantages that Sugai will likely gain if he decides to bring inventory storage and bike delivery in-house?
2. What complications might arise if Sugai makes this change? What might he have to give up if he should chose the new approach?
3. On balance, do you think that converting to an in-house operation would be the way to go? Why or why not? Put together the best case you can to support your decision.
Business Statistics For Contemporary Decision Making
ISBN: 978-1118749647
8th edition
Authors: Black Ken