Productivity and Cost Paper

Essay by McJr75University, Bachelor'sA-, March 2007

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IntroductionThis paper is a productivity and cost paper in which I will describe a company that has made strategic changes. These changes will be based on productivity, wages and benefits, and other fixed and variable costs. Further more I will incorporate the law of diminishing marginal productivity and the relationship between productivity and cost. My chosen company for this discussion will be Dollar General. Dollar General is one of the leading dollar store retailers in the US 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. The Company headquarters are based in Goodlettsville, Tennessee. Dollar General offers its customers an assortment of consumable basic merchandise, which include: health and beauty aids, packaged food products, cleaning supplies, hardware, stationery, household items 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 10 employees, including the store manager.

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 2008. 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, and advertising.

The Company recently announced...