All day long each working day of the week salespeople at fritolay punch information into their handheld computers at the end of each workday these sales people download the collected information to computers at local sales office or at home. These downloaded data are then transmitted to corporate headquarters in Dallas. Where within twenty five hours they are made available for those who want o view it. Information on one hundred frito lay product lines in four hundred thousand stores is available on computer screens in easy to read color coded charts. Red means a sales drop, yellow a slowdown and green an advance. This system allows problems to be identified correctly quickly. Frito lats control system helped the company solve a recent problem in Houston. Sales were sluping in area supermarkets. One supervisor turned on his computer called up data for south Texas and quickly identified the cause A regional competitor had introduced El Galindo a white corn tortilla chip the chip was getting good word of mouth advertising and store managers were giving up more sheld space that traditional tostitos tortilla chips. Using this information the frito lay supervisor sprang into action he worked with a product development tea, to produce a white corn version of tositos. Within three months a new product was on the shelves and the company won back lost market shares. Interestingly this control mechanism at frito lay is relatively new. Before installation it would have required at least three months for supervisors to pinpoint the problem but with the new system gather data daily from supermarkets scans them for important clause about local trends and warns executives about problems and opportunities in all frito lay markets.
1. Describe the type of control that Frito lay is using. Why do you think they’ve chosen this type of control system?
2. Identify instances in the case Frito lay is using preventive abd corrective controls