Final answer:
ShopRite Morristown should assess if they can handle increased inventory without added costs, whether faster delivery leading to fresher bread could boost sales, and if they are financially equipped for earlier payments before deciding to increase the bread roll order from Vanilla Patisserie.
Step-by-step explanation:
ShopRite Morristown is currently receiving bread rolls in a fixed order quantity of 180 with a delivery time of 2 days from Vanilla Patisserie. However, ShopRite Morristown has an option to increase their order size to 300 which will get them a reduced delivery time of 1 day. To evaluate whether ShopRite should increase its order size, we must consider their average daily sales, which is 55 bread rolls per day.
With the current order size of 180 and a delivery lead time of 2 days, ShopRite has enough inventory to last them a little over 3 days (180/55), which seems sufficient. However, increasing the order size to 300 would give them enough inventory for almost 5.5 days, which may lead to potential overstocking and increased holding costs. Moreover, the faster delivery time of 1 day, while beneficial for inventory turnover and freshness of the bread, also implies earlier payment and thus, potentially increased cash flow issues.
Ultimately, the decision to increase the order size should be based on ShopRite Morristown's turnover rate, storage capacity, spoilage rates for bread, financial liquidity for upfront payment, and the potential sales boost from having fresher bread available more often. If ShopRite Morristown can manage the increased inventory without considerable additional costs, and if faster delivery could potentially increase sales due to fresher bread, then increasing the order size might be beneficial.