Dheza L.

Manuba
BSAIS – 4B
CASE NO.2
AFG Co. Basis for Production

I. Statement of the Problem

Warehouse congestion caused by unsold inventory and production staff
threatening to stop working because the logistics department failed to remove the
production department's stock pile. The issue of the product's shelf life also affects the
manager.

II. Cause of the Problem

1. Congestion in the warehouse results from a lack of sales of the product
because clients who rarely visit the market to buy the product are quarantined.
2. Since there is a lot of stock that has accumulated in the production department
as a result of production, production staff are threatening to interrupt the
operation.
3. Because the goods aren’t being sold and is piling up in the warehouses, the
manager is under pressure to prevent product damage because the shelf life of
the product is only three months. Customers also avoid buying products that
have been in production for longer than a month.

III. Alternative Solution

1. In order to clear its warehouses and reduce the risk of product degrading, AFG
should start delivering food directly to the locations of the consumer. The
drawback of this strategy is that the corporation would have to pay extra for
residential delivery.
2. AFG should start vacuum-packaging food products to extend their shelf lives.
In this circumstance, the corporation would find it challenging to persuade the
customer of the product's longer shelf life.
 3. To get customers to place purchases, AFG could start offering discounts on its
items. Since there is a quarantining period, AFG should give customers their
phone numbers by distributing them in print publications and other marketing
materials to inform them of the reduced pricing and the availability of home
delivery. Reduced prices would reduce the company's revenue.

IV. Recommendation and Justification

AFG needs to start offering the products at a discount. The merchandise should
be delivered to the clients' homes simultaneously. Employees who are inactive,
such as production staff who are not working because they cannot continue to
manufacture the products, should be used to deliver packages to customers'
homes. Selling the goods at a reduced price would support the business in
obtaining some money, which is far preferable to losing all revenue due to the
shortening of the product's life.
Reference
AFG Co. Basis for Production. Retrieved from https://www.coursehero.com/file/85309982/Case-
Problem-1docx/
Aguirre, R., (2021). Operations Management. Retrieved from
https://www.studocu.com/ph/document/jose-rizal-university/bsa/case-study-1-operations/
11907536
Navas, P. (2021, Jan). Case Study – Operation. Retrieved from
https://www.scribd.com/document/490485545/Case-Study-Operation