Thirteen-Week Detail
End of First Week
On Location
One week later, the vending machine service man returns with one case of each product to refill the machine. He has no idea how much of each product has sold until he arrives and opens the new location’s vending machine. He finds that product numbers 2,3,4,6,8,9 are sold-out, and product numbers 0,1,5, and 7 have sold only one item each. The vending machine service man writes this information into his service log and refills the machine. A case of product is 24 items so the empty slots are one item short of being completely full. The first week revenue is $154 or $22 per day, which is 62% of potential.
End of First Week, Begin Second Week
Back at the Shop
The vending machine service man returns to the warehouse after finishing his route for the day and gives his service log to his supervisor. The supervisor reviews the log and decides to drop the four products that did not sell, select five of the six products that sold-out to refill that vending machine, allowing two slots for each of the five products (number 2, 3, 4, 6, and 8). The supervisor notes this information on the log and gives it to the data entry department. Unfortunately, a totally integrated software solution package is not available for the vending machine service business. The information must be divided among two or three different applications and some information is entered more than one time, greatly increasing the chance of human errors and increases labor expenses. This example assumes that the fruits of all this effort results in correct product orders sent to wholesaler, product delivered, new selection quantity lists printed for the vending machine service man, and the truck properly loaded in time for the next scheduled refill of the vending machine in this example.
End of Second Week
On Location
The vending machine service man returns a week later (the end of week 2), with two cases of each of the 5 products to refill the example vending machine. Once again the same products were sold-out and the others sold only one item each. As before the vending machine service man writes this information into his service log and refills the machines allowing two slots for each product. He had spares for all products except for product number 2, which is filled with only 24 items in each of its 2 slots. The second week revenue is $148 or $21.14 per day, which is 59% of potential revenue.
End of Second Week, Begin Third Week
Back at the Shop
The activities at the shop are similar to previous week, except there are no changes made in selection quantities for the example location. No one expects any product to completely sell-out since there is twice the quantity available for each product.
End of Third Week
On Location
The vending machine service man brings two cases of each product again. Surprise! Product number 2 is sold-out again. Product number 3 sold 64%, number 4 and 6 sold 90% each, and product number 8 sold 50%. The vending machine service man has more than enough product to refill all the slots, except for product number 2, which has only 24 items for each slot of its two slots. The third week revenue is $195 or $27.86 per day, which is 78% of potential revenue.
End of Third Week, Begin Fourth Week
Back at the Shop
The supervisor reviewed the vending machine service log for this location. The supervisor does not know if product number 2 sold-out just before the vending machine service man arrived or much earlier, so he does not know if the product deserves an additional slot or not. Product number 8 sold only 50% of its items however; so it could be reduced to one slot, and product number 2 could be increased to three slots. The supervisor decides to make the changes, writes appropriate notes on the vending machine service log and gives it to data entry. Wholesale product orders are created, sent, deliveries received, vending machine service route lists are printed, and vending machine service trucks are loaded.
End of Fourth Week
On Location
The vending machine service man brings three cases plus three spares of product number 2, and two cases each of products number 3, 4, and 6, but only one case of product number 8. Just as expected, the existing two slots of product number 2 are empty. Product number 3 sold 62%, product numbers 4 and 6 sold 90% each, and product number 8 sold 48%. The fourth week revenue is $193 or $27.57 per day, which is 77% of potential revenue. The vending machine service man removes the items from one of the slots for product number 8 and adds them to the items in the remaining slot for product number 8. Three slots are filled completely with product number 2. All remaining slots are filled to capacity with their respective products, and the single slot for product number 8 is topped off, so that the vending machine is now completely full.
End of Fourth Week, Begin Fifth Week
Back at the Shop
The supervisor believes that tuning for this vending machine location is complete (at least for the rest of this season), so no changes are required for this example vending machine. Wholesale orders include three cases of product number 2, one case of product number 8, and two cases each of products number 3, 4, and 6. The supervisor is feeling good. It took only four weeks to tune this vending machine location. He expects the revenue percent to jump into the eighties, and run there for the rest of the season, which has about eight weeks left. Of course he will be very interested to see what next week actually produces.
End of Fifth Week
On Location
The vending machine service man arrives and finds yet a different surprise. The two slots for product number 3 are still full. Not even one item of product number 3 sold! The vending machine service man figures something must be wrong with the vending machine, so he fiddles with the mechanisms related to the two slots for product number 3. He spends a few more minutes testing and decides it is working properly now. He writes the sales information into his vending machine service log, along with a note about the suspected malfunction, which is now working properly. Another surprise. Product number 2, which has three slots, has sold out again! Product number 2 sold 100%, products number 4 and number 6 sold 90%, product number 8 (only one slot) sold 88%, and product number 3 sold 0%. The fifth week revenue is $187 or $26.71 per day, which is 75% of potential revenue. The vending machine service man refills the vending machine except, since a complete sell-out on product number 2 was not expected, only 24 items for refilling each of the three slots for that product are available. The two cases of product number 3 are not needed this time since none sold, and the vending machine service man must take them back to the shop.
End of Fifth Week, Begin Sixth Week
Back at the Shop
The supervisor agrees with the vending machine service man. The reason there were no sales for product number 3 must have been a malfunction with the vending machine. The vending machine service man assures his supervisor that he spent extra time verifying that all slots of the vending machine were working properly. On the positive side, the supervisor is pleasantly surprised that product number 2 is selling so well, and congratulates himself on his decision to add another slot for that product. He wonders if he should add yet another slot for that product. The supervisor decides to leave things as they are and watch for another week.
End of Sixth Week
On Location
The vending machine service man arrives and finds that product number 3 has sold only three items. One of the slots sold one item and the second slot sold two items. The vending machine must have malfunctioned again! The vending machine service man spends even more time checking the slots in question, while thinking, “The boss will be unhappy, because I assured him the vending machine was working properly”. All ten slots seemed to be working just fine now. “They seemed to be working fine last time too,” he mutters. The vending machine service man makes a note suggesting that a vending machine maintenance man be sent out to check the vending machine to assure it is functioning properly. All three slots of product number 2 were empty again, however the vending machine service man brought three cases, plus some spares this time. Product number 2 sold 96% instead of 100%, since spares were not brought last time. Product numbers 4 and 6 sold 90%, product number 8 sold 88%, and product number 3 sold only 6%. The sixth week revenue is still 75% or $26.71 per day, which is 75% of potential revenue. The two cases of product number 3 are not needed this time since few sold, and the vending machine service man must take them back to the shop.
End of Sixth Week, Begin Seventh Week
Back at the Shop
The supervisor was not happy with this situation and questioned the vending machine service man at length. The supervisor then contacts the vending machine repair center. The vending machine repairmen are booked for the rest of the week. Some are already scheduled to work on other machines for the company of the supervisor calling. The other vending machines the supervisor has scheduled for repair are in worse shape than the example vending machine in current question. One of the vending machines scheduled for repair is not far from the example vending machine location, and the scheduled repair is on the same day that the vending machine service man is scheduled to refill the example vending machine. It is possible that the vending machine service man’s already performed work did in fact fix the problem. If his work did not, then a call (via cell phone) could get the vending machine repairman over to the example location quickly. The supervisor wonders about product number 2 again, since it did sell-out completely again, but decides to leave it alone until this problem with the vending machine is solved.
End of Seventh Week
On Location
The vending machine service man finds that the conditions are almost the same as last time. Absolutely none of product number 3 has sold! He immediately calls his supervisor at the shop. The supervisor, unhappily, contacts the vending machine repair center. The vending machine repair center contacts the repairman working on a vending machine for the supervisors company near the location of the example vending machine. The vending machine service man only has to wait ten minutes for the vending machine repairman to arrive. The vending machine repairman tests the vending machine and finds nothing wrong with it. The vending machine service man calls his supervisor at the shop and tells him the news. The supervisor is not satisfied, and talks with the vending machine repairman as well. The supervisor insists that something must be wrong with the vending machine, and the vending machine repairman insists that it is functioning perfectly. The vending machine repairman suggests that maybe people stopped selecting that particular product at this particular location. Angrily the supervisor says, “I have been monitoring the activities of this particular vending machine at this particular location for seven weeks. You stick to your business and I will stick to mine!” The supervisor then switched the phone off.
The vending machine service man and repairman both felt the wrath of the supervisor, so they discussed the situation further. They decided to switch the items from one of the slots for product number 3 with the items from one of the slots from product number 4. If the problem moved with the product, then the problem was that people were not selecting that particular product now. If the same two slots still had no sales, then there must be something wrong with the vending machine. Both men hoped the problem was not with the vending machine. They might even get an apology, but would not count on it.
The vending machine service man noted the sales figures and other comments, and refilled the vending machine. Product number 2 sold-out of all three slots (100% sold), product number 4 and 6 sold 90%, product number 8, with only one slot, sold 88%, and product number 3 sold 0%. The seventh week revenue is $186 or $26.57 per day, which is 74% of potential revenue.
End of Seventh Week, Begin Eighth Week
Back at the Shop
The supervisor put his anger and frustration aside, and confronts the business at hand. Wholesale orders still had to be made, and besides he had several hundred other vending machines to consider. Before leaving the issue of the example vending machine however, the supervisor remembered that product number 2 had completely sold-out again. Once again he decided to leave things as they are, and wait to see what happens next week.
End of Eighth Week
On Location
The vending machine service man arrived finding the condition almost the same as last week. All three slots for product number 2 were empty, and both slots for product number 3 were nearly full. Last week the items of product number 3 from one slot were switched with the items of product number 4 from one slot. Product number 3 used to occupy slots two and three, while product number 4 used to occupy slots four and five. Last week the items from slots three and five were switched as a test. Product number 4 sold just well as it had before, so that must mean there is nothing wrong with slot three (where product number 3 use to occupy). The items of product number 2, which had been moved to slot five (where product number 2 use to occupy), sold only 1 item. The problem must be with product number 2. The machine was functioning properly, the vending machine service man wrote his notes, and refilled the vending machine, finished his day, and went back to the shop. Product number 2 sold 100%, product numbers 4 and 6 sold 90%, product number 8 sold 88%, and product number 3 sold only 8%. The eighth week revenue is $191 or $27.29 per day, which is 76% of potential revenue.
End of Eighth Week, Begin Ninth Week
Back at the Shop
The supervisor finally accepted the fact that for some unknown reason product number 3 was not selling well any more at that location, so now he must find another product to replace product number 3. The supervisor had been thinking about adding another slot for product number 2 because even with three slots it has been selling out completely. The supervisor reviewed the history of this example vending machine at this new location, and noticed that product number 9 had sold out the first week. It was random chance that product number 9 was not selected to continue into the second week. (There was room only for five products with two slots each). The supervisor decides to completely drop product 3, and use one of its two slots as another slot for product number 2, and add new product number 9 into the other slot.
End of Ninth Week
On Location
The vending machine service man arrived to find the condition to be almost the same as last week. All three slots for product number 2 were empty, and both slots for product number 3 were nearly full. Product number 2 sold 100%, product number 4 sold 90%, product number 6 sold 88%, product number 8 sold 84%, and product number 3 sold 8%. The ninth week revenue is $189 or $27.00 per day, which is 76% of potential revenue.
The product assignments in the vending machine were reorganized. Four slots now were filled with product number 2, one slot was filled with new product number 9, products number 4 and number 6 were given two slots each, and one slot was filled with product number 8.
End of Ninth Week, Begin Tenth Week
Back at the Shop
The supervisor hopes this is the end of the tuning cycle for this particular vending machine market location. It has already been 9 weeks, the end of this season is near, and it will be time to begin a new tuning season again soon.
End of Tenth Week
On Location
Things are much better when the vending machine service man arrives this time. All product selections sold well, and only product number 9 was sold-out. Product number 2 sold 79% (with 4 slots), product number 4 sold 90%, product number 6 sold 88%, product number 8 sold 84%, and product number 9 sold 100%. The tenth week revenue is $213 or $30.43 per day, which is 85% of potential revenue.
The vending machine was refilled completely, except for product number 9, which added only 24 items. This is one item short of a 25 item full capacity. Only one case was brought this time, without spares.
End of Tenth Week, Begin Eleventh Week
Back at the Shop
The supervisor is much happier since 85% of revenue is higher than most of his top performing vending machines. He is tired of thinking about this example vending machine at this new location, and initially plans to let it run with its current product selection quantities. The supervisor reviews the product sales again for the tenth week, performs some calculations, and determines that product number 2 sold only four more items, with four dedicated slots, than it had when it had only three slots. He could replace the fourth slot of product number 2 with more of product number 9, which sold-out. The worse case would mean a loss of 4 item sales if there were no increase in sales for product number 9, and the best case could increase sales by 21 items. The supervisor decides to take the chance, considering all the time, effort, and expense already spent on this particular vending machine’s tuning. The possible increase in revenue could help offset the already sunk costs.
End of Eleventh Week
On Location
The vending machine service man arrives with enough product number 9 to completely fill two slots and reduce product number 2 back to three slots. The other product quantities are the same as before. Four slots of product number 2 sold 77%, one slot of number 9 sold-out, but had only 24 items to start, for 96%, two slots each for products number 4 and number 6, sold 94% and 84% respectively, and product number 8 sold 80%. The eleventh week revenue is $210 or $30.00 per day, which is 84% of potential revenue.
End of Eleventh Week, Begin Twelfth Week
Back at the Shop
The supervisor feels better now that there have been two weeks in a row that the revenue percent for the example vending machine has been in the eighties. Hopefully, this week will be better, or at least not much worse.
End of Twelfth Week
On Location
Three slots of product number 2 sold out for 100%, two slots of product number 9 sold 86%, two slots of product number 4 sold-out for 100%, two slots of product number 6 sold 80%, one slot of product number 8 sold 72%. The twelfth week revenue is $226 or $32.29 per day, which is 90% of potential revenue.
End of Thirteenth Week, Begin Thirteenth Week
Back at the Shop
The supervisor is excited that the revenue percent range for the example machine has hit the nineties, however he knows that it will not stay that high. The supervisor can already see that the tuning process must begin again very soon, for the next new season.
End of Thirteenth Week
On Location
Product number 2 sold 96%, product number 9 sold 80%, product number 4 sold 100%, product number 6 sold 76%, product number 8 sold 68%. The thirteenth week revenue is $219 or 31.29 per day, which is 89% of potential revenue.
End of Thirteenth Week
Back at the Shop
The last week was good. The revenue percent range for the example machine was still in the high nineties. This machine market location is better than most. The supervisor decides to let it ride for another week which will make the 1st week of the next quarter be quite a bit better than the 1st week of last quarter for this particular vending machine market location. The first tuning at a new location is always the hardest; however it never gets easy. There is too much guessing involved in the vending machine service business. The supervisor wishes he could see inside the vending machines all the time instead of only when a vending machine service man arrives and opens the door.
Next: Old World Tuning Summary
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