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2013 harvest = Just in time inventory management and Co-op complaints
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Hayinhere
Posted 10/15/2013 00:20 (#3384279 - in reply to #3384172)
Subject: RE: 2013 harvest = Just in time inventory management and Co-op complaints


Central NE

It comes down to this.  Should a coop create value for its members or cause members to loose money by using it.

     I have a friend who manages a bowling alley/entertainment complex.  He used to keep the lanes full but the owner wanted more money so they raised prices.  Now half the lanes are empty, bowling numbers are down, concession numbers are way down and so are profits.  My friend realizes that he has to staff the complex whether 18 lanes are full or 36 lanes are full, but if all the lanes are full he will sell more concessions.   The owner equates profits to the price of bowling and can't understand what the underutilized capacity of the facility is costing him and will not allow the manager to reduce the price of bowling.

     Shifting the price of bowling down to move the demand up to the point of capacity with no one waiting in line is economics 101.  Somehow the Co-Op conglomerates have lost this.  They have a full staff with a fraction of the utilization compared to the single location that I spoke of.   The single location literally can not dump trucks any faster because of the time it takes to push a probe into a load of grain and suck out a sample.  The two gals running the scales are fully utilized.   They price grain where the demand curve meets the supply curve to maximize capacity.   They can double or triple their grain handling without additional capital investment or hiring more people simply through economics 101.   

 It would take three facilities and three times the employees all built on the back of patrons to handle the same grain when ignoring the supply demand curve. 

PS  The well run location also cuts their checks and will be in the next days mail and they blow the sample back to the truck when it is on the inbound scale before weighing it. 

Badly run businesses do not deserve to be subsidized



Edited by Hayinhere 10/15/2013 01:03
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