Client: Packaged Food Processor
Problem:
One of the Midwest's oldest cooperatives is a major fruit packer specializing in frozen and canned fruit and juices. The organization needed to determine margins on their multiple product line offerings. They intended to use that data to improve their internal cost systems and highlight inventory valuation-related issues.
Scope of Work:
Quantalyst was asked to build a software-based model to determine auditable costs at the item level and then use the data produced by the model to determine correct inventory values. During the project, management expanded the scope to include definition of both inventory and non-inventory costs.
What Quantalyst Did:
- Mined data systems to acquire auditable production detail on an item-by-item basis.
- Isolated inventory and non-inventory costs and incorporated that data in the reporting structure.
- Discovered that inventory valuations were within acceptable ranges. However, Quantalyst did uncover a significant issue concerning dividends paid to growers against existing inventories.
Results:
- The co-op incorporated the new new model-based method into their costing systems.
- The Board of Directors used the data from this project to resolve the dividend issues with their growers.
