Dew Case Study Solution

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DEW relies on a complex distribution system in order to get their products to its customers. Only about 30 percent of the firm’s total sales are purchased directly from DEW. Smaller companies and retailers usually make purchases through one of the many independent distributors. Unfortunately, it’s been recently discovered that the results are terrible and profits are down 30 percent from this same quarter time last year. In order to boost sales, senior management has decided to eliminate all direct sales from DEW, distributors are now required to maintain a minimum inventory level which is higher than before, and form a task force to study and propose ways that the firm can recapture its lost market share. I do think that it was smart to eliminate…show more content…
They are already doing so poorly that they should focus on finding a good long-term investment plan. Forcing distributors to maintain a minimum may make them less interested in continuing to carry their product. In addition, it states that DEW is giving the option to their distributors that they don’t need to pay for the first six months. They are also guarantying that any additional inventory that remains unsold after nine months may be returned. Having this option only benefits this company short term because they are able to decrease the cost of inventory they are carrying at that moment. However, if there is not a high demand for their products, there is still that possibility that their distributors will return their inventory to them within the nine month time frame. If all the distributors return the inventory because they weren’t able to sell the product, DEW’s cost of inventory will skyrocket bringing the company back to the bottom. A quick temporary fix should never be the appropriate solution for a business that has long-term

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