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Mooremans Hardware B

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Mooreman's Hardware B. Group 8. Jeremy Archibald. Catherine Angel. Jerry Bell. Alison Moss. Introduction. Privately owned hardware stores. 7 rural locations ... – PowerPoint PPT presentation

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Title: Mooremans Hardware B


1
Mooremans Hardware B
  • Group 8
  • Jeremy Archibald
  • Catherine Angel
  • Jerry Bell
  • Alison Moss

2
Introduction
  • Privately owned hardware stores
  • 7 rural locations
  • Central IL and IN
  • Based out of centralized warehouse

3
Case Background
  • Mooremans lacks standardized system for returns
  • 30 days
  • Full Refund
  • Original Box
  • Cash for cash, etc.
  • Returned merchandise recorded in inventory
  • IBM (POS) terminals
  • Exchange defective merchandise

4
Company Strategy
5
Company Strategy
  • Overall Strategy
  • To build and maintain long-term customer
    relationships through quality customer service
  • Merchandise Return Strategy
  • Create customer loyalty through a practical and
    simple merchandise return system

6
Merchandise Return Control Objectives
7
Merchandise Return Control Objectives
  • Reduce Total Amount of Returns
  • Reduce Customer Loss
  • Reduce fraudulent returns
  • Keep track of returned inventory (POS)

8
Risks Associated with Minimizing Returns
9
Risks Associated with Minimizing Returns
  • Merchandise may be damaged during delivery
    process
  • Customer vandalism and accidental damage
  • Customer dissatisfaction of product selection

10
Controls for Reducing Amount of Returns
11
Controls for Reducing Amount of Returns
  • Pre-approved vendor list based on quality
  • Warehouse receiver breaks shipments down into
    skus and inspects quality
  • Inventory shipped directly to stores inspected by
    store managers

12
Risks Associated With Reducing Customer Loss
13
Risks Associated With Reducing Customer Loss
  • Angering the customer by selling inferior goods
  • Confusing customers with lack of specifics in
    return policy
  • Inconsistent return policy due to employee
    discretion

14
Controls for Reducing Customer Loss
15
Controls for Reducing Customer Loss
  • Refund the same type of payment as original sale
  • i.e. cash for cash
  • 30 days time period, giving customers ample
    chance to return

16
Risks Associated with Fraudulent Returns
17
Risks Associated with Fraudulent Returns
  • Customers might return items not purchased at
    Mooreman locations
  • Shoplifters may steal items and return them
  • Customers may create defect themselves and then
    return them
  • Ex Worn out drill bit

18
Controls for Reducing Fraudulent Returns
19
Controls for Reducing Fraudulent Returns
  • Customers must return merchandise in same box
  • SKU system keeps track of sold and returned
    inventory

20
Risks Associated with Keeping Track of Returned
Inventory
21
Risks Associated with Keeping Track of Returned
Inventory
  • System crash
  • Incorrect data entry
  • Employee manipulation

22
Controls for keeping track of returned inventory
23
Controls for keeping track of returned inventory
  • Password sensitive intranet
  • Business management software
  • POS System

24
Similarities to Fashion Retailer
25
Similarities to Fashion Retailer
  • Both want to maintain customer relations
  • Prevent fraudulent returns
  • SKUS
  • Updated inventory accounts

26
Differences to Fashion Retail
27
Differences to Fashion Retail
  • Returns minimized through fitting rooms
  • Fraudulent returns easier to detect with store
    specific designs and marked tags
  • Fashion retail does not have different outside
    venders
  • Inventory turnover rates
  • i.e. seasonal fashion

28
Recommendations
29
Recommendations
  • Receipt requirement
  • In-store credit if no receipt
  • Easily accessible return policy
  • Return policy sign for customers
  • Print return policy on receipt
  • Sales staff knowledgeable of products
  • Periodically check store for damaged inventory
  • Cant return perishable products
  • I.E. caulk, paint, oil
  • Entering defect reason to keep track of problems
  • Hard copy and backup drive for returns system

30
FPC
31
FPC
32
Costs of Recommendations
33
Costs of Recommendations
  • Prevention
  • Signs stating policy
  • Printing policy on receipt
  • Training employees
  • Hard copy and backup drive
  • Inspection
  • Labors cost of periodic checks
  • External Failure Costs
  • Shipping products back to warehouse vendor

34
Benefits
  • PreventionFailure
  • An ounce of prevention a pound of cure
  • Our recommendations will help minimize total costs

35
Questions?
  • ?????
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