Answer Happy

400 isting Fli CASE 10.1 Pain Away Corporation Gordon Sumner, chief executive officer of Pain Away Corporation (PAC), is feeling stressed out. The producer of transcutaneous electrical nerve stimulation (TENS) battery operated device that people use to treat pain, is faced with a new opportunity but Summer is not sure how to approach it. The Food and Drug Administration has changed the rules and low current TENS units can be sold directly to consumers, starting in three months Previously, they required a medical prescription for short-term use and could be rested from medical device companies The market potential is huge thanks to the aging US population PAC could sell through national drugore chains, pharmacies, and Amazon, but Summer has some reservations His past experience as chief supply chain officer for a power tools manufacturer hashim remembering all the fulfillment issues when dealing with large retailers. He recalls retailers wanting small, frequent shipments to a larger number of locations with faster and faster service, advanced shipping notification, and RFID tags on all products for inventory vis hty Of course, the retailers want to buy products at a wholesale price and sell them at healthy markup Sumber wants to avoid those headaches and protect PACS profe margins. He believes the consumer market will best be served through an e-Commeror direct sales model PAC will require an easy-to-use consumer Web site, a strong marketing campaign, and excellent fillment capabilities if he is to compete effectively with the global TENS manufacturers that will flock to Amazon for rapid market access PAC has started production of three consumer TENS madds at the company's factory eutside Louisville, Kentucky. The inventory is being held in the PAC distribution center (DC) next to the factory, awaiting their release date. The DC currently fills orders for medi cal device companies and Sumner thinks that consumer onders could also be fulfilled there Sumner calls a meeting with his supply chain leadership team about pursuing the e-Commerce method and to get their recommendations regarding fulfillment. All are in agreement that direct-to-consumer is the way to go. After some brainstorming the team identified the reasonable options to serve the US market Option 1-Upgrade the existing PAC DC in Kentucky to handle both consumer orders and medical device company orders Option 2-Expand the PAC fulfillment network Establish regional DC in Reno, Nevada and Columbus, Obie to complement the existing Kentucky DC Option 3-Outsource fulfillment to a capable 3PL company. This would allow PAC to focus on production, demand planning, and marketing Sumner's next step in to fully evaluate the three options and choose a path forward before his upcoming meeting with PAC's board of directors. They will ask tough questions and Sumber must be confident in his recommendation Dispter 10 CASE QUESTIONS 1. Compare and contrast the three options from the perspective of customer service Which do you believe will provide the hest level of service? Why? 2 Compare and contrast the three opsons from the perspective of cost. Which one do you believe will provide the most economical solution for PAC Why? 1. What types of functional and cost trade-offs will Sumner need to analyze! 4 Which distribution option do you feel gives PAC the best opportunity for future succes! Why? & How should PAC leverage automation for its commer fulfillment processes?