Dollar General Productivity and Cost Paper

Essay by shastabritt July 2007

download word file, 4 pages 3.5

IntroductionProductivity and cost is a way to describe and understand the strategic changes a company has made. These changes will be based on productivity, wages, benefits, and other fixed and variable costs. Further more it will incorporate the law of diminishing marginal productivity and the relationship between productivity and cost. The company at hand for this discussion will be the Dollar General. Dollar General is one of the leading dollar store retailers in the United States of America who just recently announced changes that will be taking place.

Dollar GeneralDollar General is a discount retailer of general merchandise.

In fiscal year ended February 3, 2006, Dollar General's then 7,929 stores generated more than $8.58 billion in sales. Dollar General is a customer-driven distributor of consumable basics with more than 8,000 stores in 35 states. Stores are served by nine distribution centers in: Alachua, Fla.; Scottsville, Ky.; Indianola, Miss.; Fulton, Mo.;

Zanesville, Ohio; Ardmore, Okla.; Jonesville, S.C., South Boston, Va. and Marion, Ind" (Dollar General, Para.1,7).

The Company headquarters are based in Goodlettsville, Tennessee. Dollar General offers its customers an assortment of consumable basic merchandise, which includes: packaged food products, household items, cleaning supplies, health and beauty aids, hardware, stationery, and basic apparels. The majority of its items are priced at one dollar. "Dollar General employs more than 64,000 people, the average Dollar General store has approximately six to ten employees, including the store manager" (Dollar General, Para.4).

Strategic ChangesDollar General announced plans on upgrading their store base and expanding as well as enhancing the store. They plan on doing this by the ending fiscal year of 2009. They have announced a chare repurchase program worth $500 million over the next two years. Changes expected to take place are remodeling and relocating of a number of stores, inventory changes, store labor,