TX Blended Whiskey Group Project

Name 2

TXBlended Whiskey Group Project

Executivesummary

Inventoryisamongthekeyelementsthatretailers andmanufacturerscannot ignore.Inventoryis managedusingdifferentmethods.Forexample,thegrainsuppliers usethesingleperiodproblemapproachto managetheir inventory.Firestone &amp Robertson is an exampleof a manufacturingcompanythat managesthree majortypesof inventory,includingrawmaterial,in-process goods,andfinishedgoods,which includethebottled whiskey.Thetypeof methodusedto manageinventorymay bedeterminedby theshelflifeof theinventoryortheavailability of therawmaterial.

Firestone&amp Robertson usesa uniquesupplychainstrategybecauseitisa craftdistiller. Theuniqueness of Firestone &amp Robertson’s strategyisconfirmedby theprocessusedin theproductionof TX Blended Whisky. Firestone &amp Robertson acquirethegrainfrom thelocalsuppliers, which is a marketingstrategy.TX Blended Whiskey isproducedin five steps,includingmalting, fermentation,distillation, aging,andbottling.Firestone &amp Robertson preferthereputationof thehandmadedistillery as opposedto an automated distillery. Whiskyhas lowmargins(15 %), which forceretailers to rely on establishedbrandsforprofitsandconsiderwhiskeyas a functionalproduct.

Whiskyisconsideredas a functionalbrandforseveralreasons,includingthelonglifecycle,low-profitmargin,andproductvariant.Firestone &amp Robertson decisionto maintaina handmadereputationis one of thefactorsindicatingthatthecompany’sstrategyis unfit.Thisisbecausetheautomateddistillation would helpthecompanyaddressthegrowingdemandforwhiskeyandincreasesthereturnsthrough largescalesales.Itwould beexpectedthatthefixedcostwill be distributedamonga largenumberof whiskeyunits,which will increasetheprofitmarginper unit.Therefore,automating thedistillation systemis an appropriatestrategy.