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Maryland IFSM 300 – Virginia’s Finest Meat Distributors

Virginia’s Finest Meat DistributorsVictor Constantine is owner of one of the few remaining privately owned meat distributors in theWashington DC Metropolitan region. Independent butcher shops have decreased in number over thelast decade, since meat sales have fallen overall and restaurants have increasingly moved to largewholesale distributors. However, this has created an opportunity for specialty butcher shops in marketsthat provide only basic options through these larger retailers. Victor’s market niche is providingcustomized meat cuts for each client – clients are individual restaurants, chains, caterers and specialtyplaces such as country clubs.Virginia’s Finest Meat Distributors (VFMD) operates a 40,000 square foot processing plant in Winchester,Virginia. The company is doing very well with revenues steadily increasing over the last several years andreaching $19 million in gross revenue last year, netting a modest but satisfactory net profit. As would beexpected, the largest expense is the cost of the meat itself, followed by labor costs currently hoveringaround $2.5 million per year. Current debt includes approximately $4 million on its current building. Retail butchers have been replaced with grocery chains and big box stores. In addition, people are eatingmore meals away from home. With an increasing percentage of food dollars spent in restaurants, thereis a growing need for sales of specialty meats to the niche market that can afford and desire them.Caterers, especially those serving high-end corporate and private events, and upscale restaurants seekhigh-quality specialty meats at market prices. VFMD sells to catering businesses and restaurants,meeting their special timing needs and highly variable special demands, which puts VFMD in highdemand and provides them with an above average margin of profit.VFMD treats its employees well and the labor costs include matching funds on employees 401K plans, avery good medical plan, and bonuses for all employees. At this time, there are approximately 50employees. The business began with Victor’s father who originally sold meat to local families andrestaurants from a wagon and ran the business out of his home. Today’s business is quite different. Inaddition to Victor, who has long-term relationships with the best suppliers of meat as well as anunderstanding of the craft of butchering, the leadership team includes Victor’s son and daughter. Hisson, who performed every job including receiving, shipping and cutting the beef, is currently the VicePresident and is expected to take the reins when his father retires; his formal education includes foodservice management, state food hygiene laws, business to business sales, and finance. Victor’s daughterhandles marketing and social media.A typical day starts very early in the morning when employees receive carcasses, cut and grind the meat,weigh, package and label it (if needed), and load the 8 refrigerated trucks owned by VFMD. These trucksdeliver on average 65,000 pounds of meat and poultry to roughly 375 customers in the Washington area pg. 1 Rev 2 – 10/20/2016 each week. Deliveries consist of standing orders of specific cuts of meat, special orders to be deliveredon specific days, and expedited deliveries to meet unexpected demand.At the operational level, orders are taken by the office clerk over the phone or Internet. The clerk workswith Victor and the customers to ensure their individual needs are met. For example, when a restaurantclient couldn’t get its nine-pound racks of lamb to cook equally from end to end, Victor reduced the sizeof the cut he sold them to precisely 7.5 pounds; the problem was solved and a valuable customer waspleased. Orders for immediate delivery of specific cuts are written down and carried from the clerk tothe butchers on duty who will prepare the cuts. They will be packaged, priced, and prepared fordelivery. While products can be replenished within a few days, there is the possibility of certain itemsrunning out because of unexpected high demand, and VFMD may run out of stock on certain productsuntil new shipments arrive. In such cases, the sales staff will offer suggestions of substitutions or specialoffers in order to make sure all customers are satisfied.The majority (about 85%) of VFMD’s product is boxed beef from the Midwest which arrives every otherday. Additionally, pork, beef, lamb, and poultry are sourced from local farms. Victor insists onpurchasing from well-managed and supervised farms where no drugs or medicated feed are used. Themajority of beef is wet-aged – a common process where the meat is aged by sealing it in a bag with itsown juices. However, the real profit is in dry-aged beef that high-end restaurants require, and then sell,at a substantial premium. Costs are considerably higher as a large percentage of weight (close to 50%) islost in the dry-aging process and the time to age is considerably longer. This process results in a moretender and flavorful meat. The profit margin is higher than wet-aged beef as high-end restaurants arewilling to pay for this – which in turn their customers expect. VFMD operates a very busy dry-agingfacility where the dry-aging process takes from 15-28 days and the stock rotates continuously. Victorrefers to his dry-aging facility as the “Money Room.”While VFMD is doing well in today’s market, Victor is aware of the increased trends in healthy eating andvegan lifestyles. In addition, he’s seen the number of producers shrinking as small, high quality livestockfarms and ranches struggle to stay competitive with large-scale commercial producers. He’s alsoobserved the impact to high-end restaurants when the economy dips. He has read the American MeatInstitute’s analysis on why meat prices rise and fall:"The meat industry is unique because it relies on live animals as its raw materials. Within livestockproduction, there is a classic, livestock price cycle. Prices rise and fall as producers raise moreanimals in response to high prices or low supply, and then cease producing when livestockinventories become high and prices fall." (North American Meat Institute, p.1)(North American Meat Institute, Jan 2015, Fact Sheet, retrieved on April 14, 2016 fromhttps://www.meatinstitute.org/index.php?ht=a/GetDocumentAction/i/89479)VFMD’s primary competitor in this market is Maine Avenue Butchers, which was established fifteen yearsago and sells only high-quality beef products, both wet and dry-aged. Maine Avenue Butchers chargeshigh prices for its quality beef, and sells primarily to caterers and specialty restaurants. There are anumber of very large big box stores in the area who are competing for business from caterers by offering pg. 2 Rev 2 – 10/20/2016 one-stop shopping for all their catering needs. Neither Maine Avenue Butchers nor the large box storesprovide the level of service and expedited delivery as VFMDVictor and his leadership team have identified the following Keys to Success as part of their businessplan:1. Maintain high quality standards for its suppliers and continuously monitor this quality.2. Provide unequaled customer service and delivery.3. Preserve meats in optimal conditions to maintain freshness and minimize waste while in thefacility.4. Maintain excellence in the skill of butchering meats through hiring, training, and supervision ofstaff.5. Listen carefully to customer needs and respond with custom-cut products, whether in person,over the phone, or through Internet orders.6. Maintain appropriate profit margins on all products.7. Increase productivity, management of the business and profit margin through the use ofinformation technology.Victor is seeking your help to analyze his business and identify areas where information systems couldhelp him better manage and grow his business. Review the Instructions above and respond to thequestions that follow. Each is worth 10 points. Questions:1. Analyze the Virginia’s Finest Meat Distributors business. This question has 2 parts.a. Discuss each of Porter’s Five Forces in relationship to VFMD. FORCE JUSTIFICATION of your selected impact List Porter’s Five Forces Minimum 3 good sentences that explain the impact of the force on VFDMto demonstrate understanding of the force.Refer to specific details from the business in the case study to supportyour explanations. You must mention relevant specifics from thecase study to gain all points for your submission. pg. 3 Rev 2 – 10/20/2016 b. Identify which one of the forces should be the primary factor in the development of futurebusiness and their information technology strategy. Include the chosen force and yourexplanation of why you chose that force using information you’ve learned in this course andspecifics from the case study in a minimum of 3 well-written sentences. Your explanationmust explicitly refer to the VFMD business in the case study. 2. Identify which of Porter’s Generic Strategies is most appropriate to Virginia’s Finest MeatDistributors and explain why you selected it in light of your Five Forces Analysis. You must incorporate information from the case study to gain all points for your response. pg. 4 Rev 2 – 10/20/2016 3. Victor uses the three business processes listed below, and each of them could be improvedusing technology. Identify and explain how a type of information technology system solutioncould improve each one of the processes. Do not research a specific product (e.g., SalesForce)but it must be clear what type of solution this is – for example, CRM, human resource system,etc.a. Purchasing meat products from suppliers. How could a technology solution improve thisprocess? b. Creating and managing a schedule to deliver ordered products (standing orders and specialorders) to the right customers each day. How could a technology solution improve thisprocess? c. Managing inventory. How could a technology solution improve this process? pg. 5 Rev 2 – 10/20/2016 4. Using the three business processes listed in question #3, identify one step in the process, andthen list one input, one system processing action, and one output that would be part of thatstep in the process. Note: these 4 pieces need to relate to each other. BusinessProcessChoose onestep in theprocess listedand write it inthe nextcolumnPURCHASINGPRODUCTS StepList the onestep in theprocess youselected InputInformation/dataitem entered intothe system as partof this process step(input needed forthe system) ProcessingProcessing oraction the systemmust perform forthis process step(what the systemwill do with theinput) OutputInformation/dataitem displayed orprinted out for theuser in this processstep(what the system willoutput/display) SCHEDULINGDELIVERIESTOCUSTOMERSMANAGINGINVENTORY 5. Victor has decided to use technology to improve one of the business processes identified inquestion #4 above. Select one of the processes and analyze the IT requirements as they applyto that process using the table below. Type the name of the process you selected on the linebelow: pg. 6 Rev 2 – 10/20/2016 Business Process for Virginia’s Finest Meat DistributorsType the name the business process that you selected from #4 here: ______________ Importance/RelevanceITRequirement High, Medium,Low, or NotApplicable (N/A)(each must have aranking, includingN/A) Explanation for Ranking Including N/A(Write a minimum of 3 good sentences for each. Include why/how the IT requirement applies tothe process you selected.In your explanation, identify the data or type ofdata used, where applicable.Specifically mention and relate your answer tothe Case Study Virginia’s Finest MeatDistributors. Usability DataCompleteness Database Reliability/Availability pg. 7 Rev 2 – 10/20/2016 Security 6. Using a cloud-based Software-as-a-Service (SaaS) solution, list and briefly explain three specificquantifiable (measurable) business benefits. These should reflect measurable benefitsachieved by using a SaaS solution specifically that would improve VFMD – not general benefits.Your explanation must explicitly refer to a SaaS solution and the VFMD business in the casestudy.a. Business Benefit #1 and explanation: b. Business Benefit #2 and explanation: c. Business Benefit #3 and explanation: 7. Victor has decided to implement a cloud-based SaaS solution to improve the process of shippingproducts to his customers. Identify one important activity that Victor would need to do duringeach of the following phases of the system development life cycle (SDLC) to implement hissolution. Your answers should demonstrate an understanding of the phase of the SDLC andimplementation of a SaaS solution. (An example answer is provided for the Programming phase—all other phases are applicable to this solution.) . Your explanation must explicitly refer to theVFMD business in the case study.a. Planning:b. Analysis and Design: pg. 8 Rev 2 – 10/20/2016 c. Programming: Since the system has already been developed by the SaaS vendor, Victor isnot required to take any action regarding the Programming Phase.d. Configuration:e. Testing:f. 8. Implementation and Continued Use: Victor would like to increase the profit margins on his products – increasing the volume on thoseproducts that yield higher profits. He wants to analyze the data he will be collecting in his newinformation system to help him do this. Identify three questions that Victor would want answers to in order to determine waysto increase sales of the more profitable products.Then, identify what information Victor would need in his information system to answereach question.Finally, explain how that information and the answers to the questions would helpVictor with data-driven decision making. For example, to solve a different problem: If Victor wanted to know when he could schedule hisdelivery trucks for maintenance, he might ask: On average, how many delivery trucks have beensent out each day of the week (over the past 6 months)? He would need to know this so hecould figure out when his trucks are least in demand. Using this information, he might see thathe makes very few deliveries on Sundays. But, his maintenance shop is not open on Sundays, sohe would have to look at the next least busy day. If he found that Tuesdays generally require thenext fewer delivery vehicles, he could schedule his trucks for maintenance on Tuesdays on arotating cycle. Victor can then use that information to ensure his trucks are in good workingorder without impacting his ability to deliver the products to his customers.a. Question, information needed and explanation #1: b. Question, information needed and explanation #2: c. Question, information needed and explanation #3: pg. 9 Rev 2 – 10/20/2016 9. Victor has asked you to explain how e-commerce could help him in dealing with his current andnew commercial customers. (He is not interested in taking orders from just anyone ordering onthe Internet.) Identify two different categories of e-commerce (as defined in the Week 2 LearningResource "Categories of Electronic Commerce") that VFMD could use to improve theirbusiness.Explain how each e-commerce category would be used and what business processchanges would be needed to implement it. Your explanations should include the nameof Victor’s business and demonstrate your understanding of each of the two ecommerce categories. a. E-Commerce category #1, how it would be used, and what business changes are needed: b. E-Commerce category #2 how it would be used and what business changes are needed: 10. Explain how each of the following could benefit Victor’s Virginia’s Finest Meat Distributorsbusiness. Use 2-3 sentences for each and be sure your explanations demonstrate that youunderstand each of the types of systems. Your explanation must explicitly refer to the VFMDbusiness in the case study.a. Supply Chain Management System b. Customer Relationship Management System c. Enterprise Resource Planning System pg. 10 Rev 2 – 10/20/2016 pg. 11 Rev 2 – 10/20/2016

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