Derrick’s Ice-Cream Company is located in modern premises and manufactures and
distributes 30 different ice-cream product lines from its suburban base in the UK. The
products are distributed by Derrick’s own eet of refrigerated trucks to six major
wholesale distributors. Annual sales are currently around the £10m level, distributed among the wholesalers as
indicated in Table 1. Derrick’s control about 35% of its metropolitan market, but this
shrinks to less than 10% in outlying areas where there are many small competitors. Derrick’s will usually hold up to four weeks of stock in their central cold stores to meet
the distribution requirements of their six major customers. The cold stores cost