A Case Study on Inventory Management

BY
LOPEZ, L.
MONFORTE, Y.J.
SHINODA, Y.
URQUIZA, V.
 BRUEGGER’S BAGEL BAKERY

Background:
Bruegger’s Bagel Bakery makes and sells a variety of bagels,
including plain, onion, popptseed, and cinnamon raisin, as well as
assorted flavors of cream chesse.
Bagel business is a $ 3 billion industry. The Bruegger’s very
popular to the costumers and booming bec. Of its good
management. It is also successful bec. of its quality, they kept
trained employees to operate the equipmet need.
The company operates with minimal inventory.
 BRUEGGER’S BAGEL BAKERY

Analysis of the Case

 Cost of Bagel = $ .10
Price of Bagel = $ .50/pc. or more
 Production is by batch and by flavor daily.
 Quality is the most important.
 Practice waste management.
 Employees are trained to be competent enough to operate the
necessary equipment.
 Operates with minimal inventories.
 Freshness of bagels are maintained.
QUESTIONS AND ANSWERS:
Question 1: Bruegger’s maintains relatively inventory at either
its plants or its retail stores. List the benefits and risk
of this policy?
Answer: Bruegger’s Bagel Bakery operates w/ minimal amount of
inventories at the plant as well as their stores. The
reasons for w/c Bruegger’s follows it is due to the “
degree of freshness ” it adds to the final product at the
stores.
BENEFITS: Risk:
Reduce holding cost Cannot satisfy higher DEMAND.
Reduce ordering cost Shortage in raw mat. may interrupt
production.
Easier organization Supplier might not be able to supply in
short notice
More space Fluctuation in prices of raw material

Waste can be minimized High Transportation cost

Fresh products can be delivered
Question 2: Quality is very important to Bruegger’s.

a.) What features of bagels do customers look at to judge

their quality?

Ans.: appearance, taste, consistency and service

b.) At what points in the production process do workers

check bagel quality?

Ans.: Choosing supplier of ingredients

Monitoring the ingredients
Keeping equipment in good condition
Watch deformed bagels and remove them
c.) List the steps in this production process, beginning with
purchasing ingredients, and ending with the safe, and state
how quality can be positively affected at each step.

Ans.:
Question 3: Which inventory models could be used for ordering
the ingredients for bagels? Which model do you think would
be most appropriate for deciding how many bagels to make
in a given batch?

Ans.: a.) The inventory model used can be ECONOMIC

ORDER QUANTITY (EOQ)

b.) Models appropriate could be SAFETY

CALULATION AND Reorder Point (ROP)
Question 4: Bruegger’s has bagel making machine at its plants.
Another possibility would be to have a bagel making
machine at each store. What advantages does each
alternatives have?

Ans.: ADVANTAGES OF MACHINE AT PLANTS

a.) Quality, shape & size can be maintained
b.) Proper utilization of manpower
c.) Less tools required
d.) Recipe secret can be maintained

ADVANTAGES OF MACHINE AT RETAIL

STORES
a.) Time saving
b.) Inventory management
c.) Reduced wastage and damages
TOOLS AND TECHNIQUES USED
1. Inventory management

2. Just in time (JIT)

3. Waste management

4. Economic order quantity

5. Replenishment using reorder point and safety calculation.

CONCLUSION
 Less inventory should be maintained

 Quality is important

 Customer oriented

 Employees should be trained properly

 Regular maintenance of machine should be done

 Proper inspection should be done from time to time
End of Presentation