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Homework answers / question archive / A university bookstore is a nonprofit retail outlet for textbooks, computers, and general merchandise (including trade books, supplies, and university-licensed apparel and gifts)
A university bookstore is a nonprofit retail outlet for textbooks, computers, and general merchandise (including trade books, supplies, and university-licensed apparel and gifts). It is located near the main campus of State University and controls the majority of the local market share for new and used textbooks. Other retail outlets, such as Barnes & Noble, University Drugstore (a private company), and Comp USA, have larger shares of the local market for other items. Tammy Waialua is a full-time accounting student and part-time employee of University Bookstore who recently studied the current chapter on managing constrained resources. She observed that the bookstore's primary constraints are floor and shelf space for fast selling items such as textbooks and market share for slow-selling items such as general merchandise.. Tammy approached her boss, the bookstore's general manager, and suggested that they try to improve its efficiency by managing constraints more effectively. The general manager thanked Tammy for her concern but assured her that this manufacturing technique was neither needed by nor applicable to the nonprofit bookstore.
a) Explain how University Bookstore's constraints can be both floor space (internal) and market share (external)
b) Is Tammy or her boss correct about the relevance of the Theory of Constraints to the bookstore's operations? Explain
c) Prepare a short report with recommendations for managing the bookstore more efficiently.
a. If floor space is limited it will make the shop a crowded and unorganized area where the books are unscientifically stored. Customers who are students with busy time schedules may find it difficult to find what they want and thus business may be slow. The floor space is therefore an internal problem.
Although the store is normally the only source of textbooks in the area, in this case it would be best to place the textbooks in the front in an organized manner where they are most accessible by students.
As far as market share is concerned, there are licensed merchandise such as university-logo sweatshirts, t-shirts banners...etc. These items would not be found at other stores such as Barnes and Noble. The store would benefit greatly if they stock up on these merchandises and best if they can be sole distributor. In this case the constraint is external.
b. Tammy could be right because whatever the type of business (for profit or not) the company should always strive best to win customers and survive.
c.
- Reorganize store with a smart and sound plan.
- Stock up on products with high potential volume of sales: lecture pad, notes, pens, pencils (things that students frequently need)
- Have a marketing plan. For example: put novelty and attractive items at checkout and in window displays
- Offer promotional program, i.e. frequent buyer program, occasional sale, etc...
- Focus on customer service and train staff to work more efficiently and friendly.
A) The constraints can be internal if floor space is limited it is mostly likely a crowded and unorganized area where the books are shelved. This can make it frustrating for customers and unlikely to draw in business. Although university bookstore is normally the only source of textbooks in the area, in this case it would be best to place the textbooks in the front in an organized manner where they are most accessible by students.
As far as market share is concerned, pick items that represent the university that have logo's such as sweatshirts, t-shirts banners...etc. These items would not be found at stores such as Barnes and Noble. An emphasis on these items rather than ordinary items is best to draw in customers.
B) Tammy is right to be concerned about the relevance of constraints and should not be dismissed. Any operation whether commercial or non-profit needs to constantly analyze their business practices to maximize sales.
C) Here are my recommendations for managing the bookstore more effectively
1) Market to students and alumni
2) Only sell products relating to the university as well as convenience products such as greeting cards, pens, pencils some snack items. Anything a student might need on a daily basis.
3) Keep store organized
4) Place novelty items at checkout and the more attractive items such as sweatshirts and t-shirts in window displays
5) Check out the competition, see what they are offering.
6) Friendly customer service.
7) Have knowledgeable staff.
8) Offer incentives...i.e. eat at the local McDonald's and receive 10% discount at the bookstore.