Question: Help with this scenario. Please answer with as much detail as you possibly can for each section Grocery stores and food companies are preparing for
Help with this scenario. Please answer with as much detail as you possibly can for each section
- Grocery stores and food companies are preparing for a possible surge in sales amid a new rise in Covid-19 cases. Supermarkets are stockpiling groceries and storing them early to prepare for the coming months when some health experts warn the country could see another widespread outbreak of virus cases and new restrictions. Food companies are accelerating the production of their most popular items. These changes, a reaction to the sudden and massive shortages grocers experienced in the spring, amount to a shift from the JIT inventory management practices that have guided the retail business for decades, writes The Wall Street Journal (Sept 27, 2020).
Now, food sellers are stockpiling months, rather than weeks, worth of staples such as pasta sauce and paper products to better prepare for this winter, when people are expected to hunker down at home. Retailers are expanding distribution capacity, augmenting warehouse space, and modifying shifts.
Associated Food Stores (a coop of over 400 stores) recently started building pandemic pallets of cleaning and sanitizing products so it always has some inventory in warehouses. The Giant and Food Lion chains already have holiday inventory in their warehouses. Those chains are also storing 10-15% more inventory than they did before the pandemic to ensure they wont run out of fast-selling items. Still, some products such as cleaning wipes and canned vegetables remain hard for stores to obtain, partly because of continued high demand and because manufacturers are still trying to keep up.
General Mills said it hasnt caught up with the demand for Progresso soup, Betty Crocker cake mixes, and Pillsbury refrigerated dough. It is increasing its production capacity, but the entire industry is still struggling to rebuild inventory on similar items. Manufacturers have given priority to making their fastest-selling products, which has helped some items recover inventory in recent months. Walmart is overriding its grocery-ordering algorithms to build up extra inventory now, after decades of becoming increasingly lean. Coke is still making fewer varieties of drinks to meet the demand for its top beverages.
a. Why a change from the JIT inventory approach?
b. Why is there still a shortage of some inventory items?
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