Kingfisher School of Business and Finance: 2 Semester A.Y. 2020-2021

Kingfisher School of Business and Finance
2nd Semester A.Y. 2020-2021
Written Case Analysis No. 2
Bruegger’s Bagel Bakery
Submitted by:
Aquino, Ma. Clarissa C.
Cayabyab, Maureen Gen
Fajardo, Ashley Jane T.
Galleguez, Eugene F.
Lacano, Jhomar C.
Madriaga, Ralph Jefferson S.
Rampas, Jennifer L.
Reyes, Jhaniela B.
Tamayo, Rosalinda A.
Group (9)
Submitted to:
Ms. Maybelle Anne S. Lopez, MBA
Instructor
Date of submission: March 17, 2021

I. Problem
Inability to meet the unexpected high demand
Bruegger’s Bagel Bakery maintains relatively minimal inventories of raw materials and
the products that they produced to their stores. Their reason for this is to maintain a high degree
of freshness of their products that can be offered and delivered to their customers. In relation to
this, other costs and resources required to maintain inventory were reduced. The risk of minimal
inventory was inability to meet unexpected changes of demand especially when it increased. A
sudden increase of potential customers will drive the demand high. Due to the unexpected
increased demand of the costumers, it may result to a shortage of inventories and supplier may
not be able to supply in short notice. This may lead to customer dissatisfaction and lost sales
II. Objectives
Social:
•To provide the desired quality, demand and satisfaction of customers
• To make recommendations for how the issue can be resolved in order to achieve their target
of providing consumers with high-quality fresh goods.
•To add insights on how to improve bakery inventory management when it comes to their
strategy of retaining a reasonable amount of inventory at their plants and retail stores, taking
into consideration the potential risks and benefits.
Financial:
•To maintain minimal cost but high quality products
•To maintain positive growth of profitability
•To strengthen the policy ensuring to meet the customers demand at a minimized cost to
produce and reduced waste products. Strategic:
• To stay competent and in advantage over competitors in the market
•To determine the company's strengths, weaknesses, opportunities and threats to know which
areas of the company are performing and need to improve.
• To provide alternative courses of action, as well as selecting the most appropriate inventory
model and providing the most appropriate idea for determining how many bagels to produce.
III. SWOT Analysis
Strength
 Company’s distribution of product

- Bruegger’s Bagels Bakery are able to quickly get products out to customers since when
the bagel is in the hands of retail store.
 High return on Investment
- Bagel are the main source of revenue of the company and it is profitable for them as it
is very popular with customers. Also, they generated an average of $800,000 per year.
 High reputation of the company

-They achieved the number one spot nationally so they’re already build a good
reputation to every customer that the other enterprise or company can’t have.
Weaknesses
 Not gluten-free
- Gluten products do not stay fresh as long as wheat based pastries and it may not be
safe for consumer with celiac disease.
 Risk in supply
- Bruegger’s Bagels Bakery opted to store minimal amount of baking products to
maintain the freshness and quality of their final product. This can lead to unavailability of
stock or shortage of supply.
 Losing sales opportunities

- Holding too little inventory can hurt both profits and the relationship with customers.
Opportunities
 Expansion to industry
- With over 450 active stores in the market for years, Bruegger’s Bagels Bakery could
increase their market reach internationally by continuous improvement of their
management and marketing skill.
 Nourishing benefits of their bagels

- Although their bagels are not gluten-free, they offer low-fat, dairy-free and vegan bagel
selections.
Threats
 Minimum numbers of raw materials in plant and inventory at the stores

- It can be a threat of the company since it is minimal, there will be a chance of having a
stock outs
 It leads to decrease in cost efficiency

- we all know that the more we buy a products or materials in terms of bulk the higher we
can get trade discount from suppliers
IV. Alternative Courses of Action
1. Use the Economic Order Quantity model.

To fix inability to meet unexpected high demand is by using EOQ Model, this shows the
ideal order quantity a company should purchase. Considering the unexpected drive of demand
relates to the goal of EOQ formula that is to identify the optimal number of product units to
order.
Advantage:
It will help the company to manage the amount of cash tied up in the inventory balance
by minimizing the cost of carrying inventory and the processing of purchase orders.
Disadvantage:
Bruegger’s managers should maintain detailed data and understanding the data in
calculating figures for the continuous monitoring of inventory levels.
2. Bagel-making machine in every bakery shop.

Advantage:
At short notice, it will satisfy the demand of the consumers and retains the product
freshness, minimizing the shipment costs and reducing waste products. It will also help
to save time, reduce wastage and damages, and the transportation cost will also go
down.
Disadvantage:
Having a bagel-making machine in each shop also means having a production space for
the station of the machine thus, additional cost is needed.
3. Put up a Safety Stock.
Variability in demand is always present in every business. This creates the possibility
that actual demand will exceed the expected demand of customers. A high number of customer
will possibly create a high demand. Considering this, it becomes necessary to carry additional
inventory called Safety Stock. Brueggers' should consider this technique in order to avoid lack
of inventory when unexpected high demand will be encountered, to avoid on time deliveries to
get impact as production lead time will increase in case of increased demand and most
importantly to avoid customer dissatisfaction and lost sales.
Advantages:
 Prevents the company from running out of stock especially on unexpected times of
encountering high demand.
 Protect the company from being inflexible in meeting customers demand.
 It saves the company for maintaining customer’s satisfaction.
Disadvantage:
Carrying Safety Stock creates additional high amount of cost for the: inventory itself,
storage cost and spoilage cost.
V. Recommendation
Alternative Courses of Action 1 (ACA1) which is the use of economic order quantity, is
the recommended action to take in the case study. Their company should use the economic
order quantity model because it is more efficient than their basis of maintaining a minimal
quantity of material they use on their stores/products. Using economic order quantity model
helps their company to determine when to make an order, to avoid over-spending in an item,
and it also minimizes the ordering and the holding costs associated with the item. Economic
order quantity considers the demand, ordering cost, holding or carrying cost of an item. The 3 rd
alternative courses of action is also recommended as an action to take, this is to put up a safety
stock, which helps the company on the unpredictable fluctuation in demand and to replaced
discovered deformed products. Implementing a safety stock creates additional carrying cost but
in return it avoids the stock outs, customer dissatisfaction and potential lost sales.
VI. References
Economic Order Quantity(EOQ) model. efinanceManagement.
https://efinancemanagement.com/working-capital-financing/economic-order-quantity-eoq

Kingfisher School of Business and Finance: 2 Semester A.Y. 2020-2021

Uploaded by

Copyright:

Available Formats

Kingfisher School of Business and Finance: 2 Semester A.Y. 2020-2021

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Kingfisher School of Business and Finance: 2 Semester A.Y. 2020-2021

Uploaded by

Copyright:

Available Formats

Kingfisher School of Business and Finance

2nd Semester A.Y. 2020-2021

Written Case Analysis No. 2

Bruegger’s Bagel Bakery

Date of submission: March 17, 2021

Inability to meet the unexpected high demand

•To provide the desired quality, demand and satisfaction of customers

•To maintain minimal cost but high quality products

•To maintain positive growth of profitability

• To stay competent and in advantage over competitors in the market

III. SWOT Analysis

 Company’s distribution of product

 High reputation of the company

 Losing sales opportunities

 Nourishing benefits of their bagels

 Minimum numbers of raw materials in plant and inventory at the stores

 It leads to decrease in cost efficiency

IV. Alternative Courses of Action

1. Use the Economic Order Quantity model.

2. Bagel-making machine in every bakery shop.

3. Put up a Safety Stock.

Economic Order Quantity(EOQ) model. efinanceManagement.

You might also like