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1919 every one of them at densely populated intersections on the South Side Walgreen s predilection for busy corners remains a central tenet of the company s philosophy today, as it is making expansion decisions in the middle of another building boom When he reflected on the company s early success, Walgreen liked to reply, We just grew like topsy! Though it s unclear today what that word means (even unabridged dictionaries don t include it), it s a safe bet that Walgreen intended to express a positive assessment of the chain s acceleration Most of Charles Walgreen s reasons for growing so rapidly are pretty obvious more income, profit, and security, for starters, especially when the timing was clearly right to take advantage of its winning formula but others are less so, including increasing opportunities for the first wave of eager employees it had recruited and trained Of all the positions Walgreens employees have filled over the past century, you could easily argue that the post of store manager has always been the most crucial to the company s success and the most revered, accordingly, by underlings and superiors alike Chief executive officers (CEOs) from Charles Walgreen Sr to David Bernauer today have all recognized that the store manager position is the pivot point for the entire company When managers are hired, trained, and retained properly, the rest of the company hums But if they fail to understand their customers, employees, or the drugstore business itself, there is not much anyone in headquarters can do to save them Best-selling business guru Peter Drucker once observed, Whenever anything is being accomplished, it is being done, I have learned, by a monomaniac with a mission 17 At Walgreens, those monomaniacs with a mission have been the store managers more than anyone else From the beginning, the Kogans wrote, Charles Walgreen considered store managers to be the linchpin in the chain and encouraged them to think of themselves as independent retailers with a large and worthwhile organization behind them not, in contrast to the policies of other chains.

2 nE( 1 ) 1 n(n 1)E( 1 ) + 2 2{1 E( 1 )}

(263)

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To verify that tn is linear in n and hn is quadratic in n, a brilliant idea due to Tak cs (1962) is used First observe that tn and hn do not depend on the speci c a order in which the production orders are coped with during the production process Imagine now the following production discipline The n initial orders O1 , , On are separated Order O1 is produced rst, after which all orders (if any) are produced that have arrived during the production time of O1 , and this way of production is continued until the facility is free of all orders but O2 , , On Next this procedure is repeated with order O2 , etc Thus we nd that tn = nt1 , proving that tn is linear in n The memoryless property of the Poisson process is crucial in this argument Why The same separation argument is used to prove that hn is quadratic in n Since h1 + (n k) ht1 gives the expected holding cost incurred during the time to free the system of order Ok and its direct descendants until only the orders Ok+1 , , On are left, it follows that

gsmSCF CAMEL service (scenario 1) is started CAMEL service is terminated CAMEL service (scenario 2) is started for PDPc #1 CAMEL service remains active CAMEL service (scenario 2) is started for PDPc #2 CAMEL service remains active

Combining the above results we nd for the N -policy that the long-run average cost per time unit =

2 2 E( 1 ) N 1 (1 )K +h + , N 2(1 ) 2

(264)

where = E( 1 ) It is worth noting here that this expression needs only the rst two moments from the production time Also note that, by putting K = 0 and h = 1 in (264), the long-run average number of orders waiting in queue =

Initial DP GPRS Furnish charging information GPRS Continue GPRS Initial DP GPRS Request report GPRS event Continue GPRS Initial DP GPRS Request report GPRS event Continue GPRS

in or out of the drug field, above them 18 This sense of ownership and independence inspires the best effort from store managers to this day and is one reason turnover at that level is virtually nonexistent Walgreen put systems in place to ensure managers job satisfaction When the company opened a new store, it would install a veteran manager (which back then meant simply someone who had already been a Walgreens store manager previously) to get it started and then hand over the reins to a youthful go-getter like Goldstine or Starshak The practice of putting such young, relatively inexperienced people in charge of important stores, which recent CEO Dan Jorndt calls the quantum leap approach of promotion, remains a central strategy at Walgreens19 At Walgreens, ability still trumps seniority To give the managers a stronger sense of ownership in their stores, from the start Walgreens gave managers bonuses based on their stores profits, with which they were strongly encouraged to buy Walgreen stock Roland Schmitt loved telling the story of how Charles Walgreen would present him with his regular bonus check but hold on to it tightly, refusing to hand it over until Schmitt agreed to invest it in company stock This might seem coercive today, but as Schmitt watched his portfolio multiply over the years, he saw Charles s persuasion as excellent fiscal advice and was justly appreciative of it

2 2 E( 1 ) N 1 + 2(1 ) 2

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