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Icecreams R Us exclusively delivers ice-cream to homes in Newcastle - HSC - SSCE Business Studies - Question 25 - 2020 - Paper 1
Question 25
Icecreams R Us exclusively delivers ice-cream to homes in Newcastle. To increase market share, they are negotiating with a major service station chain, Eucafels Ltd,... show full transcript
Worked Solution & Example Answer:Icecreams R Us exclusively delivers ice-cream to homes in Newcastle - HSC - SSCE Business Studies - Question 25 - 2020 - Paper 1
Step 1
describe TWO physical distribution issues that the business needs to consider in the delivery of their product
Answer
Physical Distribution Issue 1: Transport
One of the primary issues is the transportation of the ice-cream to Eucafels Ltd outlets. Given the perishable nature of ice-cream, it is crucial to maintain a cold supply chain to ensure that the products remain frozen during delivery. Delays in transportation could lead to product spoilage, thus affecting quality and customer satisfaction.
Physical Distribution Issue 2: Warehousing
The second issue is related to warehousing. Icecreams R Us needs to ensure that they have adequate cold storage facilities for the ice-cream before delivery. This includes not only storing the ice-cream at the proper temperature but also having enough capacity to handle fluctuations in demand. Insufficient warehousing can lead to potential stock outs or excess inventory, impacting operational efficiency.
Step 2
justify ONE promotional strategy the business could use
Answer
Promotional Strategy: Point-of-Sale Promotions
A highly effective promotional strategy Icecreams R Us could implement is point-of-sale promotions at Eucafels Ltd outlets. This could include eye-catching displays, discounts, and free samples of the ice-cream.
By directly engaging the customers at the point of purchase, it can create immediate awareness and encourage impulse buying. Additionally, offering loyalty cards can incentivize repeat purchases, thus building a customer base for Icecreams R Us.
Step 3
recommend possible changes the business could make to their operations processes to address the volume and quality concerns of Eucafels Ltd
Answer
Recommendation for Operations Changes: Improve Supply Chain Management
To address both volume and quality concerns, Icecreams R Us should invest in an enhanced supply chain management system. This includes rigorous planning and scheduling of deliveries to ensure timely and efficient transportation of ice-cream to maintain quality.
Furthermore, implementing a monitoring process that tracks temperature and delivery times can help ensure that the ice-cream remains at the required quality standard throughout the supply chain. Regular training for staff on handling and transporting ice-cream can also significantly reduce the chances of quality deterioration.