Cheesy Wheezy Essay

Starting as a dainty retail store in New Glarus, Wisconsin, the Cheezy Wheezy firm had tardily grown into a chain of nine retail shops located in southern Wisconsin and northern Illinois. In recent years, nearly all its competitors had begun publish compiles, widely distri stilled in late October, advertising gift packages of tall mallows, jams, jellies, and other realise food items. heat content Wilson, son of the firms founder, had convinced his make that Cheezy Wheezy should as well issue a catalog. It was then March, and the last s instantaneouslys were melting.Henry Wilson had called his third staff meeting in as many weeks to controvert the catalog project. Present were Henry (whose title was vice president) Susan Moore, the sales conductor Jeff Bell, the inventory manager and Robert Walker, the traffic manager. Also present was Robert Caldwell, from a Milwaukee-based ad agency that was handling many aspects of the catalog project. Moore and Caldwell had just finished describing the catalogs tentative design and the allocation of catalog pages to various wargon lines.Caldwell then said, We are to the point where we must design the rule form, which volition be stapled inside the center pages. It get out be a angiotensin-converting enzyme 8 1/2-by-11-inch sheet. The customer exit remove it from the catalog, complete it, furrow it into the envelope shape, lick the gummed lines, and mail it in. The order form pull up stakes be on one side of the sheet. On the other exit be the instructions for folding and Cheezy Wheezys mailing character in New Glarus the remainder of the space will be ads for both(prenominal) impulse items. Right now were thinking of a Santa Claus make figure molded out of cheese. Enough of that, said Wilson, this group isnt here to discuss Santa dolls. Were here to design the order form.We whitethorn also have to talk a little about exchange terms. Susan? Responding to her cue, Moore said, Our biggest problem is how t o handle the transportation and shipping toll. Weve studied all our competitors catalogs. close to absorb the be into the products price, rough charge by weight of the order, some charge by money value of order, and some ship COD. How important are shipping be, Susan? asked Bell. Plenty, was her response. They run $2 to $3 for a 1- or 2-pound package. If you take a pound of cheese that we cover in our retail stores for $2, here are our costs if it goes by catalog cost of goods, $1 order management, 50 cents overhead, including inventory carrying costs, 50 cents promotional material for shipment, 50 cents and transportation costs to any point in the joined States ranging between $1. 75 and $3. 20. If, however, were dealing with bigger shipments, the relative costs vary. Im non following you, said Wilson. Its akin this, responded Moore.The wholesale cost of cheese to us is the equal per pound, no pay murder how much is sold. Order-processing costs are approximately the s ame for each order well be receiving by mail. Overhead and inventory carrying costs are everlastingly present but may be allocated in a grade of ways. Packaging costs are also about the same per order. They go up only a few cents as we move to bigger cartons. Transportation costs are hard to describe because of their tapers. Right now our whole catalog project is bogged down with the problem of transportation cost tapers. Tapers? said Wilson, turning to Walker. Youve never told me about tapers before. It sounds like some cordial of animal. Thats tapir, t-a-p-i-r, said Walker. Were talking about tapers, t-a-p-e-r-s. Oh, said Wilson. What are they? When one ships small packages of cheese, said Walker, rates are based on two factors, the weight being shipped and the aloofness. As weight or blank increases or boththe rates go up but not as quickly. This is called the tapering principle. To ship 2 pounds of cheese from New Glarus to St. Louis costs $2. 40 3 pounds cost $3. 30 5 pounds cost $4. 60 and so on.One hundred poundsno, 50 pounds is a better example because some of the parcel services well be using wont take 100 pounds50 pounds would cost $21. Theres also a distance taper. The 2-pound shipment that costs $2. 40 to St. Louis is $3. 40 to capital of Colorado and $4. 15 to Los Angeles. Cant we use the average transportation costs? asked Bell. Thats what we do with inventory carrying costs. Wont work, said Caldwell. Youll be overpriced for small, short-distance shipments and will lose sales. For heavy long shipments, youll be underpriced and will make so many sales that you might soon go belly up. Wilson shuddered and inquired, Does that mean we charge by weight and by distance? Moore answered, Its not that easy. In the cheese business, people buy by the pound, but shipping weightswhich include packagingare actually more.A customer who orders 3 pounds of cheese is in fact receiving 3 pounds of cheese plus 6 ounces of packaging materials. I wish we could sell a pound of cheese that consisted of 14 ounces of cheese and 2 ounces of packing material, but that would be illegal at worst, and of questionable ethics, at best. We have the same problems with distance, added Walker. Were trying to sell in 50 states, but who knows how far-off they are from New Glarus? We could have tables and maps in the catalog, but they take up valuable selling space. Also, if it looks too complex, we may just turn off some potential customers before they complete their orders. Some of our clients have some other problem, added Caldwell, and that is split orders. The customer will want 10 pounds of cheese, but it will be five 2-pound packages sent to five different locations. That has an impact on both packaging and transportation costs. So, what do we do? asked Wilson.