Topic > Case Study Happy Chips Inc - 852

Happy Chips, Inc. is facing a serious problem, as a single mass produced customer called “Buy 4 Less” is dissatisfied with the company's operational performance. Buy 4 Less has been cited with several problems, including frequent out-of-stocks, poor customer service responsiveness, and high prices for the products provided. Buy 4 Less has found solutions that it believes will resolve the issues experienced with Happy Chips, Inc. and if Happy Chips, Inc. wishes to remain a supplier to your company it will need to incorporate these changes. The problem, however, with this scenario, is that the employees of Happy Chip, Inc. are not satisfied with the demands that Buy 4 Less has made of them, including direct delivery to the store four times a week instead of three, the installation an automated order request system to increase customer service responsiveness and decrease product prices by 5%. Although the easiest thing for Happy Chips, Inc. to do is to accept the changes that Buy 4 Less wants to see made, Wendell Worthmann, the manager of logistics cost analysis, is not immediately on board with the changes. The main issue here is that Buy 4 Less is Happy Chips, Inc.'s only mass-market customer accounting for 400,000 annual unit sales and 12% of annual revenue. Because the mass-produced segment has such high profit potential, Happy Chips, Inc. was not satisfying its number one mass-produced customer with poor operational performance. Since the company has frequent stockouts, Buy 4 Less is unable to provide its customers with the products they want, which results in fewer sales. Customer service is an important part of any business sector and if a company has poor customer service, it will be difficult to manage and business will decline. Happy Chips, Inc. also had high prices, high prices cause demand for their product to decrease which once again means sales will increase