Tip Top

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City University of Seattle

Tip Top Evaluations Assignment

Felipe de Jesús López Cano

BSM 405 Operations Management

Professor Ashwin Rao , PhD.

Professor March 16th, 2013

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Executive Summary

There are many reasons why Tip Top Markets can be out of stock in many of their

goods at all times. If orders are not being taken correctly or written out on time, delays in

shipment can occur. If employees are not restocking shelves promptly, product will not

move in the store and customers will be upset. In addition, having expired goods on sale

will lead to an excess amount of product in the store. The dollars to buy will not be open

because customers will not be purchasing expired goods and will then complain. And

finally, it may be that the point of sale stations are old and cannot read the merchandise that

is being scanned through which can also cause pricing problems.

In order for Tip Top Markets to improve these concerns, changes must be

implemented. First we can start with the inventory system. By implementing a perpetual

inventory system, goods will be ordered as they are sold. This will also offer the financial

buyers the opportunity to observe trends in the different markets and buy into goods that

will sell more in certain stores. In addition, this will cause the store to update their POS

systems so that goods will be scanned through accurately and will help eliminate pricing

problems. Next, Tip Top markets must ensure that employees are being properly trained to

use the POS systems and learn how to properly stock merchandise and fill the shelves so

that fresh product is out at all times. 

These recommendations will take money and time but in the long run they will help

alleviate out of stock concerns and reduce customer complaints. Implementing these

changes will benefit Tip Top Markets in the long run.

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Case: Tip Top Markets

Based on the analysis of the check sheet given on the following page, the number of

quality problems associated with the quality of the product has substantially decreased over

time, while the quality problems’ regarding shortages has considerably increased.

Analyzing the Pareto chart, we see that there are consistent complaints about store and

parking lot conditions as well as complaints associated with service, speed and charging

mistakes of the checkout lines. Pareto chart demonstrates that the long waiting lines and

pricing mistakes do not appear to be the major complaint and moreover, the consequences

of shortages are more severe than the consequences of most other problems. Tip Top

grocery store needs to concentrate on solving the shortage problem. Based on the cause-

and-affect diagram , we identified four possible major reasons for shortages:

1. Forecasting

2. Supplier Deliveries

3. Spoilage

4. Inventory Inaccuracies

Further analysis of these areas is necessary before taking any corr4ective action.

Analysis of the check sheet shows no significant improvements in the areas of

pricing, store maintenance, checkout lines and shortages after implementing the

changes on July 15. In addition to the main goal of reducing shortages, Tip Top

needs to investigate the store conditions, checkout line and waiting line
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problems as well. However, these problems do not occur nearly as often and the

consequences of these complaints are not serious as the stock out problem.
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Attachments
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References

Stevenson, W. J. (n.d.). Operations Management.