I need a summary on this case.

CASE 10-1 SANDY'S CANDY Sandy Nykerk was an operations analyst for trucks to individual retail chain stores, where Mannix Model Markets, a food-store chain store personnel placed them on the shelves and headquartered in Omaha, Nebraska, with 55 treated them like any other product. The only stores in an area that extended east to Des good that could not be purchased through the Moines, Iowa; north to Sioux Falls, South Cooperative was beer because some states had Dakota; west to North Platte, Nebraska; and stricter regulations regarding the wholesaling of south to Emporia, Kansas. All the stores were beer (and other alcoholic beverages), initially to served by daily deliveries five days a week from ensure that they received all beverage tax a large complex of Mannix warehouses in receipts (although beer wholesalers opposed Omaha, with two exceptions. First, each store's legislation to relax these regulations). produce department could buy some produce Sandy knew that most of the vendor-delivered locally, which it usually did during the summer goods were ones that Mannix Model Markets and autumn months. Second, some goods were did not want to handle through its own distribu- delivered to the stores by vendors, usually oper- tion system. Milk, for example, would be very ating through drivers-salespeople who would expensive to handle because it was costly to ship stock the goods on the shelves. Examples of and had a short shelf life. Bakery products had these goods were dairy products, soft drinks, similar characteristics, although Mannix did buy bakery items, name-brand snacks, beer, panty- some bread from a private bakery and sold it in hose, candy, and yogurt. Vendors delivered ice Omaha stores under its own label. Snack foods cream directly to the stores west of Grand were also best handled by drivers-salespeople Island, Nebraska, in part because Mannix was working for vendors because they were handled short of trucks with freezer capacity, especially roughly in the Mannix distribution system; by during the summer months. the time pretzels or potato chips reached the Mannix Model Markets was a member of a shelves, they were mostly broken and filled only buying cooperative. The buying cooperative had the bottom one-third of the bag. forced many name-brand manufacturers to The buying cooperative had recently entered make their goods available to its members, in into an agreement with Schoenecker's Candies, a which case goods would be delivered first to well-known regional firm that produced eight dil- each chain's warehouse and then via chain ferent types of candies and caramels packaged and sold in cellophane bags, Mannix's experience Store clerks disliked some drivers-salespeople, was that Schoenecker's candies sold much better claiming that they took shelf-stocking work than any competing brand, almost irrespective of away from store personnel. Store management price, s sendenecker" Was the only brand that discounted this argument because they thought Mannix would carry. Sandy had received a note that many store clerks did not like to see how from her supervisor saying that Schoenecker's quickly the drivers-salespeople worked. (The candies could now be purchased directly through drivers-salespeople were mostly nonunion and the buying cooperative and handled through worked on a commission basis.) Also, the shelves Mannix's regular distribution system. The super- stocked by drivers-salespeople were always visor wanted Sandy to calculate whether Mannix neater than those stocked by ordinary store per- should stop having Schoenecker's candies deliv. sonnel. On occasion, when store clerks disliked a ered by drivers-salespeople and instead purchase particular driver-salesperson, they would sabo the candy through the buying cooperative. tage him or her by rearranging the shelves after If the cost comparisons were fairly close, he or she had left, hiding all the products behind Mannix would prefer using its own system for those of a competitor. several reasons, including some generalitios Sandy started working on her assignment regarding drivers-salespeople and some not and found that she was comparing the effi- specifically referring to the Schoenecker ciency of Mannix's distribution system, which drivers-salespeople. The three objections to deliv- handled 10,000 line items, with that of the cries by drivers-salespeople were the following: Schoenecker Candy Company, which handled 1. Their deliveries could not be scheduled, only eight types of candy in several different- and sometimes their trucks would tie up size packages. Soon, Sandy's project became an unloading dock, which could delay a known among her follow workers as the Mannix truck waiting to discharge 10 or "Sandy Candy Puzzle." Finally, to organize her 20 tons of groceries. thoughts and provide a basis for comparison, 2. Some drivers-salespeople needed space in Sandy took a sheet of paper, drew a line down the stockroom, and this meant that the middle, and listed as many comparisons as unknown people were wandering in an area possible. Her analysis is shown in Exhibits 10-A where pilferage was sometimes a problem. and 10-B 3. When a driver-salesperson appeared, this Sandy completed her tally sheets and won- interrupted the store manager or assistant dered why sales per store should be higher when manager, who routinely would have to drivers-salespeople serviced the merchandise. approve the next order and also would have She was told that this was because they did a to check in the new merchandise and agree better job of arranging the goods on the shelves, on the amount of returned merchandise the they kept abreast of changes in demand, and driver-salesperson was removing from the they sometimes placed posters and other small store, displays on the candy shelves, Present System Alternate System Shobnooker Ondy camins driven Purchaso Sohoongakerlo candies salespeople deliver and look stokes. trough yine cooperative and distribute to stop hrough Mann Morkots own distribution system Buying Terme fivery Friday, the dle tallies sales for Schooneoker must be paid within soven past seven days and store manager days after candy is received at Mannix approves. Then three days later a bu warehouse. No discounts. comes from Schoenecker with 2% discount it paid within ten days (ie, 13 days after the dis makes the telly). The entire amount to do within 30 days for 83 days of d/s telly). Wholesale and tall Bloodid Gandy ale Wholoon PO Rrigo Pala PARI Packago Rolo Package Rotall Siz Schgenockor Rrioa Size Schoeneckon Price now 1900 280 204 990 420 300 1076 MO SON Averago Timor twentory Goods are on consignment, meaning Candy would be in the Mannix warehouse that Schoenecker owns them and only for an average of two weeks and on a collects for those that are sold. retail otore shelf for an average of one week Avedago galas por siper Wook 1103% 3, kos. 708 82 DRO 100 onkolog Blog 30 MAO3-2pkost PRON Set word Store pera do not good gorool moro con Shrinkage on Store Shell Uneodpuntod-forfose: 2 porcent 2 palount per woak, puld for by Mannix per week, paid for by Mannix Markots. Markets. Present System Alternate System hel Samenate, palditory boton edker, Ordering Costs Absorbed by Schoenecker Candy Co. 1% per day. 4 days a week, for each However, store manager or assistant of 24 items (8 types of candy in three must approve order, twice a week, taking sizes of package). a total of 10 minutes time, Assistant manager makes $16,000 per year plus 18%-fringe. Stockay Absorbed by sengenako ndy.com 20 minutosol clerkis ond thore 000 poryoan Warehousing Costs Absorbed by Schoenecker Candy Co The Mannix Warehouse costs $10,000 per day to operate. Its throughput to 750 tono por day, tive duys a wook. Door lostgio Costa var.ch on Milean Chocking in Goods at Store Takeb 10 minutos per of managers No check-In necessary..controls are at or nostetarit manager's time. warehouse, and truck is sealed in between warehouse and store. Max Marko S00 and phy the schoen Candy Icondido and use y.gosto Boleved to be lebo sind, rathen than ontora only the Marx Worabo roceiptiorm deed be checked