Morgan Dollar Tree

Morgan Dollar Tree - Dollar Tree Stores Inc i Dollar Tree Stores Inc An Investigative Report Robert Belardo Sarah Feller Morgan McGrady Obed Rojas

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Dollar Tree Stores, Inc. i Dollar Tree Stores, Inc. An Investigative Report Robert Belardo Sarah Feller Morgan McGrady Obed Rojas Randall Winward November 20, 2007 Dr. Mark Barratt SCM 345
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Dollar Tree Stores, Inc. ii Table of Contents Executive Summary…………………………………………………………1 Introduction………………………………………………………………. .1-2 Problem Statement…………………………………………………………. .2 Why Expand?……………………………………………………………. ..2-3 Dollar Tree’s Strategies…………………………………………………. ..3-5 Costs……………………………………………………………………….5-7 Cartons Processed…………………………………………………………7-9 Expected Utilization…………………………………………………….…. .9 Inventory Turnover………………………………………………………. ..10 Further Analysis……………………………………………………….…. ..10 Conclusion……………………………………………………………. ..10-12 Appendix………………………………………………………………. .13-14 References………………………………………………………………….15
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Dollar Tree Stores, Inc. 1 Executive Summary At the present, Dollar Tree is one of the leading competitors in the dollar retail business and has expanded greatly since the company was founded in 1986. The store format has evolved through the inclusion of a growing company and building strong customer and supplier relationships. Dollar Tree, unlike its competitors, continues to price products at one dollar, which has given the company the opportunity to expand the number of stores and generate a higher growth rate in sales and in earnings per share. For the past two years, Dollar Tree has been looking to expand one of their current distribution centers in Briar Creek, Pennsylvania, or build a new distribution center in Hartford, Connecticut. This change has been considered because the Briar Creek distribution center operates at an average utilization of 92% and a peak utilization of 124%. In 2004, because of the high utilization rate, Dollar Tree was forced to rent expensive off-site space to handle excess flow of products. Dollar Tree is looking to make a quick decision because the company does not want the logistics capacity to become a constraint and create a large negative impact on the entire company. Although both options seem feasible, expanding the current distribution center in Briar Creek, Pennsylvania is Dollar Tree’s best option. Expansion is considered the best option because lower cost, better efficiency and utilization rates, and the balance this decision this decision will create between overcapitalization and conservatism. With the Briar Creek expansion, the distribution network is capable of
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This note was uploaded on 06/24/2008 for the course SCM 345 taught by Professor Maltz during the Spring '08 term at ASU.

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Morgan Dollar Tree - Dollar Tree Stores Inc i Dollar Tree Stores Inc An Investigative Report Robert Belardo Sarah Feller Morgan McGrady Obed Rojas

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