please I need help for this case I just need a brief executive Summary for this case

MARGARET WARREN AND M-POWERED IDEAS Margaret started M-Powered Ideas in January 1997 to offer small-office desktop publishing services. In addition, M-Powered Ideas faxed newsletters and announcements for the Westem Ontario district of the Purchasing Management Association of Canada. Prior to starting M-Powered Ideas, Margaret was employed as a professional purchasing agent for Victoria Hospital in London, Ontario. During the summer of 1997, Margaret visited an herb farm in California and came across a handmade-soap maker with whom she spoke at length. Intrigued by the chemical blending and creativity involved in the soap-making process, she purchased several books on soap making and immediately began experimenting with soap formulations that were produced in one-pound batches. Margaret shared her creations with family and friends who kept returning, even offering to pay for more soap. Soon after, she began to show and sell her line of fragrant handmade soaps outside of this group of family and friends. Margaret created the brand name Utopia Soap" for her product and produced it under the umbrella name of M-Powered Ideas. UTOPIA SOAP As sole operator of Utopia Soap, Margaret opened a workshop in her backyard where all soap production took place. Her soaps started with a special combination of coconut, olive and palm oils -the base oils; the blending of additives and fragrances resulted in numerous soap blends. For example, one standard soap Authorized for uso only in educational program outside these paramete

Authorized for use only in educational programs at Conestoga College until Sep 02, 2021. Use outside these parameters is a copyright vialalion Page 2 9B00D018 produced and labelled "Jasmine Dream" contained an infusion of dried calendula blossoms in olive oil. Other standard blends were likewise descriptively labelled (e.g., "Seabreeze," "Winery Weekend," "Berry Fresh" and "Manly") and were typically offered on a year-round basis. In addition to these standard blends, Margaret offered specialty products such as an emu oil soap and custom blended soaps. The average production cost per bar of soap was $1.' Sales of Utopia Soap for 1999 amounted to $10,000. Approximately 70 per cent of anual sales were for standard soaps. Additionally, 40 per cent of annual sales came from Ontario retailers such as gift shops, craft stores, healthfood stores and bed and breakfasts as the soaps were primarily viewed as gift items or skincare products. All soaps were sold to retail and wholesale customers for $2.99, with retailers typically selling the product with a $1.00 mark-up (Margaret also retailed a small percentage of Utopia Soap herself at $3.99). Despite the relatively small volume of soap sales, Margaret anticipated a 25 per cent growth in sales during the current year with a goal of reaching $100,000 in annual sales at the end of the next three years. Based upon the past two years of sales, Margaret planned for 80 per cent of this year's soap business occurring between mid-April and mid-November. HANDMADE SOAP PRODUCTION AND MATERIALS PURCHASING The production of standard and custom handmade soap involved melting base oils to a temperature ranging between 100 F to 150 F. Concurrently, sodium hydroxide was mixed with water, and this combination was eventually blended with the melted oils at a temperature of 100 F. Color, fragrance and other additives (e.g., ground oatmeal, dried flowers, etc.) were next added and the mixture poured into molds. Producing a typical batch of soap (approximately 20 pounds.) took three hours. After spending 24 hours in an insulating chamber, the molds were removed and allowed to rest at room temperature for three days. The soap was then removed from the molds and allowed to rest for an additional 24 hours. After cutting, the soap cured for 24 hours, was trimmed and then air cured for four weeks. A typical batch yielded 75 soap bars. Given that sales growth projections were constrained by the current production capacity, Margaret was investigating the potential upgrade of her "low-tech" production process (e.g., she currently melted the oils using an electric heating element and a pot) by purchasing heating equipment with precise heating controls and a custom-made cutter. The use of this equipment would increase the batch size up to 100 pounds. Materials used in the production of standard soap, such as base and essential oils, were typically purchased every five weeks. Base and essential oils accounted for approximately 90 per cent of soap production cost (see Exhibit 1). Given that a 467 millilitre bottle of essential oil, for example, might cost $100, Margaret's material purchases averaged $200 an order with average shipping costs of $10. Shipping lead times from vendors averaged two to three days. On average, she kept approximately eight weeks of finished goods inventory on hand of standard soap products. Materials for custom soaps were purchased once orders were confirmed. THE PURCHASING CO-OPERATIVE Operations on the scale of Margaret's Utopia Soap typically lacked purchasing clout when dealing with materials suppliers. The production quantities of MPI's typical materials orders were to0 small to meet purchasing discount volumes, and some vendors were quite unresponsive from a service standpoint to All amounts in Canadian dallars unless otherwise stated. 29/35