CASE 9-1Young Again PharmaceuticalsCliff Crandall, senior director of transportation for Young Again Pharmaceuticals (YAP), isgearing up for his company’s most critical product rollout in more than a decade. YAP hasdeveloped a breakthrough liquid suspension that reverses the ageing process for anyone over 35years
of age. Available only by prescription, the new product has been dubbed
âTwentysomething in a Bottleâ by the media. Demand is expected to be
very high despite the outlandishprice tag of $395 for a month’s supply.The product is being manufactured in YAP’s San Juan, Puerto Rico laboratory and will bedistributed to major retail pharmacies in the United States and Canada. Crandall is responsiblefor selecting the mode and contracting with carriers to deliver the product. He is concerned aboutthe safe and timely delivery of the initial product shipments in May to the retailers’ distributioncenters. The product is high value, somewhat fragile, and of interest to thieves. Some product,stolen from the laboratory, has already appeared on auction websites.In an effort to make effective transportation decisions and minimize YAP’s risks, Crandalldecided to hold a brainstorming session with his logistics team before signing any carriercontracts. The discussion of key risks produced the following list of concerns:â¢âIf shipments are late or incomplete, retailers will penalize us with vendor chargebacks.You know they will hit us with small fines for delivery mistakes.ââ¢âI’m worried about shipment delays or freight loss from hurricanes in the AtlanticOcean.ââ¢âYou’ve got to consider temperature sensitivity issues. If the product freezes, we won’t beable to sell it.ââ¢âI’ve been reading about all the piracy problems experienced by ocean carriers. Youknow, a 20-foot container of our product has a retail value of nearly $275,000.ââ¢âI’m more concerned about theft of individual cases at ports and while the product is onthe road.ââ¢âWe’re looking at border delays and Customs fines if we don’t properly document andmark our freight.ââ¢âOur brand image will take major damage if the product gets into unauthorizeddistribution channels due to theft or misdirected deliveries.ââ¢âThe company sustainability push has led to reduced packaging and biodegradablepacking materials. If the cartons get wet or bounced around, we’re going to end up with a lot ofdamaged, unsellable product.ââ¢âThose major East Coast ports can get very congested during peak shipping season. Thatwill cause delays.âBy the time the meeting was over, Crandall realized that he needed to spend some time lookinginto these issues. While he was pretty sure that some problems were remote, Crandall thoughtthat it would be wise to evaluate each one. His new concern became how to conduct an effectiverisk assessment.CASE QUESTIONS1.Assess the risks identified in the brainstorming session. Create and populate a tablesimilar to Figure 9-2.2.Based on your answer to Question 1, what are the three primary risks that you believeYAP must address? Why?3.What do you recommend that YAP do to mitigate each of the three risks identified inQuestion 2?4.What should YAP focus on after attempting to mitigate these transportation risks?Notes:
Text is attached case study is on page 317 and the figure 9-2 mentioned
in question 1 is located on page 300. each question should be answered
in 2-3 paragraphs. After an introductory paragraph, provide a summary of
the situation, in subsequent paragraphs , the student should present
the key learning that came out of the situation and make recommendations
to improve the situation presented. the paper should conclude with a
summary paragraph that answers the question, “why should anyone care”
about this situation.
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