Summer Grills Inc is an old-line company that started out making wooden matches. As that business waned,
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The plant where the company produces barbecue sets is located in a small town, and many workers have been with the company for many years. During the transition from wooden matches to barbecue grills, many employees gave up their weekends to help with changing over the plant and learning the new skills they would need, without pay. In fact, Mac Wilson, the company president, can reel off a string of such instances of worker loyalty. He has vowed to never layoff any workers, and to maintain a full employment, steady rate of output. “Yes, I know demand for these babies (barbecue grills) is seasonal, but the inventory boys will just have to deal with it. On an annual basis, our output matches sales.” Inventory is handled by a system of four warehouses. There is a central warehouse located near the plant that supplies some customers directly, and the three regional warehouses.
I guess they think we’ve got an unlimited supply.” Then he adds, “I thought when we added the warehouses, we could just divide our inventory among the warehouses, and everything would be okay.”
Take the position of a consultant called in by president Mac Wilson. What recommendations can you make to alleviate the problems the company is encountering?
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