Pl
NAINTIIINA
I
IWWI
TN
AT
TN
WRATLAT
1WA
W
INWVW
L
WRLALWT
T
INT
T
A
W
Flv'luvu
LA
P
AL
LR
A
T
NA6LTNA
e
Questions
As
the
company
was
growing
at
such
a
rapid
rate,
several
questions
lingered
on
Kummer's
mind.
California_facility:
Kummer
had
not
completed
a
detailed
capital
budget
analysis
to
determine
the
feasibility
and
profitability
of
a
geographic
expansion.
He
was
anticipating
that
the
West
Coast
facility
size
would
be
equivalent
to
the
Madison
site
and
would
have
similar
overheads
and
operating
margins
as
the
current
operations.
Additionally,
in
order
to
gain
full
advantage
of
any
possible
synergies
between
its
two
distribution
centres,
ACD
would
have
to
make
a
concerted
effort
to
coordinate
operations
between
the
locations.
Inventory
controls:
Till
date
inventory
buying
decisions
had
been
made
on an
‘as-needed’
basis.
As
inventory
levels
continued
to
increase
to
support
sales
growth,
inventory-buying
decisions
would
need
to
be
standardised
to
achieve
greater
efficiencies.
Competition:
To
gain
market
share
effectively
ACD
would
have
to
develop
a
strategy
to
compete
head-to-head
with
Alliance.
Furthermore,
ACD
would
have
to
monitor
the
activities
continually
of
the
small
players
within
the
industry
to
ensure
that
they
would
not
be
able
to
compete
for
the
same
customers.
If
two
or
more
small
players
were
to
merge,
they
might
develop
critical
mass
to
attract
the
attention
of
major
retail
outlets.
