Optimizing Operations and Inventory Management at Kent Natural Food Store

Assignment Task

Overview

Kent Natural Food Store (KNFS) is a Co-Op that serves the community as a full-service grocery, offering fresh produce, bulk foods, packaged and refrigerated products, natural health and beauty products, vitamins and herbal supplements. They primarily carry local and organic items, and specialize in products without artificial ingredients, toxic chemicals or products tested on animals. Essentially, they provide safe, non-toxic and environmentally friendly products. You can read more about their mission and purpose here.

Structure

At KNFS, all products are organized into 21 departments. In addition, there are 7 buyers responsible for ordering and pricing of products within each of the departments they control. In the normal ordering process, each buyer keeps track of products that require reordering, and then places an order with a vendor. As KNFS also sells local Structure At KNFS, all products are organized into 21 departments. In addition, there are 7 buyers responsible for ordering and pricing of products within each of the departments they control. In the normal ordering process, each buyer keeps track of products that require reordering, and then places an order with a vendor. As KNFS also sells local produce, for example, vegetables, fruits, and soaps, some of these products are purchased as and when they become available. In addition, KNFS also special orders items for their customers.

Problem Statement

The growth and operations at KNFS have been organic (pun intended). While KNFS utilizes a Point- of-Sale system, no systematic analysis has been done with the data toimprove operations and sales at the store. As such, there is little coordination (from the data perspective) on what items need to be ordered, when they should order, or how much Problem Statement The growth and operations at KNFS have been organic (pun intended). While KNFS utilizes a Point- of-Sale system, no systematic analysis has been done with the data to improve operations and sales atthe store. As such, there is little coordination (from the data perspective) on what items need to be ordered, when they should order, orhow much they should order. Further, KNFS has no clear insight into how it should manage its operations to improve efficiency and effectiveness in fulfilling its mission ofserving the local community. One ofthe first issues facing KNFS is to have a better sense ofthe current store operations.Specifically, the seven buyers would like to have clarity on some ofthefollowing:

• Which items are selling the most?
• Which items are selling the least? How much inventory do we have?
• By item quantity and cost. Are there items we should order soon? How much?
• Which items have been in inventory the longest?
• Especially important for perishables.
• What are the total sales?
• What are the related costs of goods sold?
• How much space does the inventory occupy?
• Which department generates the most sales by unit space?
• What are the Total Sales for the store?
• What about Total Cost?

Additional Questions

The board of Kent Natural Foods met last night and we discussed the results ofour meeting with the students. After some good discussion about what a dashboard can do, | asked the group tocome up with some dashboard requests. Here are the ideas | received:

1. Repeat customer - Items that sell repeatedly tothe same customers are items we need to have in stock. You may not have access to customer data. | can get you that if necessary.

2. Physical dimensions - What is the relationship between shelf space and sales and can we learn anything about howto use our space better for sales? | understand we need physical measurements. Would you like us to measure the shelves bydepartment?

3. Information on perishables - Again, you may not have data on this. We do write off items that are pulled from the shelf, and that data is in the POS. | will find it and send you information. Items that are written off regularly are probably wasting shelf space. SE, — Daten rany Saletanweiner ITYPeeaes estate — MacRae NDA Tees

4. Predictive buying-Some buyers say thisis not so important because we can't buyin quantity, but ifwe know aregular pattern ofsales on an item, we can predict how much to buy next month or in future months.

5. Effects ofchanging price - If wedrop an item's price by 25 cents, 50 cents orone dollar, how many more ofthe item do we need to sell to make the same profit? That can help us measure our success ifwe lower the price ona rjoY=e)remK=110B

6. Instances when an item sold. Each instance of a sale is important because it brings someone into the store. We normally measure quantity sold, but buying ten ofsomething ata time is only one store visit. Buying one piece on ten separate visits is ten visits to the store where the customer might buy other things.

Objective

Your objective is to build a dashboard that provides a sense ofthe status of operations/inventory/sales for KNFS to help the buyers take more effective action. This could include which items need to be reordered soon, or which items bring in the most sales, etc.

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