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Theory of Constraints in a Non-Profit Organization. See attached file for full problem description.
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.
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The solution provides explanations and references for this problem in about 525 words.
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 ...
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