Product details

EPTA America is a US distributor of packaged sweet baked goods, such as croissants and cakes. The company imports its products from Europe and sells them to consumers through convenience stores, grocery stores, and supermarkets in the US. The operations of the company involve managing inventory under the combined challenges of perishability of products, long lead times, and minimum shelf-life guarantees required by downstream retailers. This case illustrates the supply chain operations of EPTA America, introduces the problem of perishable inventory management for packaged food products faced by the company, and discusses the company’s experience in developing a solution. It describes the choices available to the company for sourcing: two different ports with different lead time characteristics, and ambient versus frozen form in which the product can be shipped. The key operational decisions to be made by the company in this case study are: (i) whether to use Days of Cover as a metric for inventory management or to switch to an Order-Up-To-Level ordering rule based on 'Inventory Position,' and (ii) how to incorporate demand uncertainty, (uncertain) lead times, and alternative sourcing choices in weekly ordering decisions.