Nicole Foster, Grand Valley State University When MasterTag was founded in 1949,

Question

Nicole Foster, Grand Valley State University When MasterTag was founded in 1949, its found Schmidt, set out to be a manufacturer of plastic fishing bobbers. Then, in 1950, Mr. Schmidt was approached by a local green- house owner and was asked if he could produce a line of horti- cultural labels for plants. At the time, these labels were made of wood. Mr. Schmidt adapted his machines to produce these labels and has been manufacturing the plastic "tags" for plants ever since. Over the years, the labels have increased in quality and However, there are several problems with this ordering process. The main issue stems from the fact that the exact quantities of tags that will be n and the introduction of new items. To avoid a shortage of tags, seed companies order ers. Tags are ordered early to allow for the time needed to incorpo- rate the tags with the seeds. Seed companies usually end up each year with customers often end up with millions of leftover tags er, Ludwig huge numbers of leftover tags. In fact, MasterTag's largest now feature full-color pictures of the plants along with the name and planting and care instructions When MasterTag's management became aware of all th unused labels and unhappy customers, they decided they must Many of MasterTag's largest customers are seed companies cme up with a better solution for achieving a match between supply and demand of the tags. One possible solution would be to that sell the seeds to commercial growers. The large seed com- panies typically place one or the beginning of the growing season. The seed companies the sell their seeds and the labels to their customers who grow the plants and sell them to the end consumer. For various reasons, the seed companies do not like ordering tags, but do so because their customers demand labels with their seeds two large orders with MasterTag at make an initial, fairly large batch, which would be produced and shipped directly to the growers instead of the seed companies, as is now being done. Later, when the grower results became avail- able, a second batch would be produced using information from growers on how many additional tags are needed. The second batch would then be made and shipped to the growers. (See fig ure for Before and After.)

Explanation / Answer

1) This approach helps us to match the demand and supply at the grower's end. There won't be any unused MasterTags left with the seeders.This approach requires initially shipping a large batch of Tags to the growers directly.Later, when the results from growers is available, another batch based on the additional Tags needed will be shipped to the growers.Hence with Collaboration with the growers,it is possible to reduce the inventory with the seeders.The seeders no longer have to be involved in sorting and segregating Tags for the seeds,

2. Pros of this Plan

1) Reduced Inventory at the Grower's end.

2) MasterTag will be able to get a better margin on their product by direct sales with the growers.

3)Even the seeders will have reduced warehousing order.

4) The seeders no longer have to be involved in sorting and segregating Tags for the seeds.

Cons

1) By shipping Tags directly to the growers, MasterTag has to make frequent orders to each particular grower.Before, they were able to ship an order of large quantity of Tags to seeders.This would save them some effort and generate more sales.

2) It is not possible to expect possible co-ordination from the growers.

3) Less number of sales and extra effort has to be put up by the MasterTag company to coordinate with several growers rather than just one single seeder company.

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