Ever wonder about the
process that goes into getting those refreshing cokes to your
local supermarket or convenience store? Although the Coca-Cola Bottling Company
is located in Atlanta, there are several distribution centers
around the state. One is located in Athens, Georgia and services
Jackson, Oglethorpe, Clarke, Oconee, Green, Morgan, Barrow and
Madison Counties. This center services retail outlets such as
supermarkets, convenience stores, and supercenters. It also services
vending areas such as those located throughout the University
of Georgia campus.
Let's take a look at this
process and what mathematics is involved is getting your favorite
drink to one of these outlets.
Each day the center manager
at the Athens distribution center orders thousands of drinks from
the Atlanta Bottling Company, and each night these drinks are
delivered to the warehouse.
How does the center manager
know the amount to order? This is based on information that the
account managers (salespersons) give him. Several salespersons
are employed by the distribution center to sell the product to
the various retail outlets. Any mathematics involved in this?
Sure! As you can see from the above pictures, the products come
packaged in layers. There are 8 cases to each layer and 13 layers
for each full pallet. If a client wants 90 cases, the package
would have to be broken before being loaded on the delivery truck.
How many cases should the account manager sell to his client so
that the packages do not have to be broken? What if the client
wants 200 cases?
The client also has what
is known as a 'build sheet' which lists the preferred amount of
product to be stocked in the store. When the account manager makes
a sales call, he/she can simply look at this 'build sheet' and
figure how many and the types of product he needs to order for
Once the amount of produce
a retailer needs is determined and this big red truck delivers
the cokes, how does the retailer decide what to charge?
Each account manager does
what is termed as "trade math" by the industry and can
figure gross profit, profit
margin, markup, turnover, % week supply, days on hand, adjusting
to 100%, retail, cost, and percent change for the client.
For example, gross profit would be the difference between the
wholesale price and the selling price. If a 12-pack costs the
retailer 2.50$ and it is sold for $2.99, then it is easy to figure
that the gross profit is $.49. But what about the profit margin?
Click on one of the terms to find the definition then try to figure
all some of the items listed based on a cost of $2.50, a selling
price of $2.99, weekly sales of 300 cases, and an inventory of
100 cases. If a retailer wants to make a 30% profit, how much
would a 12-pack need to sell for?
Each day when the account
managers return to the distribution center, they must check up
and make sure all figures balance for the day. They also look
at their goals and decide what they need to do meet their quotas.
They need to figure increase and decrease in sales, and what percentage
of the total volume they are bringing into the center.
The warehouse workers
also do mathematics when loading trucks. Printouts such as the
one shown below tell the loader how many cases are needed. Remember,
the product can be can, 2-liter, 20-oz., 16-oz., etc. These workers
have to figure how much product can be put on a pallet and how
much weight can be put on a truck. The Department of Transportation
has specific guidelines related to weightload for these trucks,
and the trucks are not all the same size.
When drivers leave the
warehouse, they are charged out with the merchandise they have.
For example, if a driver leaves with 500 cases, he must return
with cash, check or charges that total the price of $500 cases.
The account managers who
do the actual selling are responsible to a supervisor at the distribution
center. These supervisors have volume goals each month. They also
need to know their gross profit volume on a daily and weekly basis.
They need to know the percentage that their total sales are up
or down. Their job depends on it!!!
Not only does the company
sell to retail outlets, they also sell fountain drinks using these
vending trucks. And the pricing for his unpackaged product is
computed completely differently!
if you ever feel the urge to ask your teacher, "When will
I ever use this math?", think about the coke you're drinking
and know that a lot of mathematics occurred in getting that product
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