Yuji Kojima

Case Analysis (Expurma)

Sugar Sweet Inc.

Question #1:

1. At the period prior to implementing the distribution strategy, the company contacts 20% of the
total number of target retailers in the region i.e. 20% of (320,000+290,000+210,000). This gives
the number of current retailers to be 164,000. The number of anticipated retailers participating in
the pre-trial period is 20% of 164,000, which gives 49,200. In the post-trial period, the number of
retailers expected is 55% of 49,200 giving 27,060.

Question#2:

2. The average amount, in unit sales or dollars, which the retailer can make, derives from table
2. The expected number of paying customers is 10 i.e. 10% of 100 customers per day. The
projected unit sales per day are 11.2 i.e. 10 × 1.12. The projected amount of daily sales, in
dollars, is $14.00 i.e. 10 customers × $1.40. In relation to annual sales, the anticipated number
of paying customers is 10 customers per day × 260 days giving 2,600 customers. The expected
annual unit sales are 11.2 units per day × 260 days giving 2,912. The project annual sales in
dollars is $3,640 i.e. $14 per day × 260 days.

Question#3

3. An average retailer requires the number of large packs equivalent to 2,912 units per year
divided by 180 units per large pack giving 16 packs per day. In relation to small packs, the
number is equivalent to 2,912 units per year divided by 92 units per pack giving 32 small packs
per year.

Question#4

4. In relation to large packs, the total number is 8856 orders for high performers + 4,428 orders
for medium performers + 8,856 orders for low performers, which is 22,140 orders. In relation to
reorders, the total number is 8,856×7 high performers + 4,428 × 5 mediums + 8,856 low
performers, which provides 110,700 reorders. In terms of small packs, the number of pack
orders is 27,060 while reorders are 292,248. In relation to the second six-week period, large
pack reorders are 73,484 while small pack reorders are 175,619. In total, large packs are 205,
902 while small packs are 494, 927.

Question#5

5. Table 3 and 4 provide information necessary for cost, revenue, and profit calculation for the 3
distribution centers. The total revenue is $ 99,126,515 logistics cost is $7,085,381 while total
production cost is $87,624,226. The total display cost is $1,261,980 bringing the total costs to $
95,971,587. Therefore, the profit is $3,154,928. Following the same procedure, the total costs
are $95,796,380, and the profit is $3,330,135.