Case Study : Dollar Tree Logistics

902 WordsApr 1, 20164 Pages
SCHM 6211 Supply Chain Management-Transportation CASE STUDY 1: Dollar Tree Logistics Submitted by: Sharabh Kochar (NUID: 001630222) Company Background Dollar Tree Stores, Inc. is the largest retailer among low-price convenient variety stores in the United States. Selling all of their merchandise at the one dollar or less price range, the company’s stores offers a wide variety of general goods, including food, housewares, health and beauty products, hardware, cleaning supplies, and many other consumer items. It also gets it’s 40 percent of its merchandise from imports, purchases over-runs from manufacturers, and maintains a strong focus on keeping costs low. Company History Dollar Tree, Inc. was founded in 1986 by Macon Brock…show more content…
Variety Merchandise which includes toys, gifts, party goods, greeting cards, hardware, and other items. Seasonal Goods such as Easter baskets, summer toys, lawn and garden equipment, and Hallowing and Christmas merchandise. Fixed costs Compare to Joilet DC Fixed costs per square foot Readjust for Expanded Size Variable costs Variable cost/carton $0.19 $0.19 $0.19 Total Variable costs Total costs of DC Operation $0.43 per square foot x 16,083,277 = $6,915,809.11 $6,915,809.11 / 1,200,000 square foot = $5.7631 $5.7631 per square foot x 1,003,000 square foot = $5,780,463.78 $5,780,463.78 x 3 years = $17,341,391.3 Total Cartons Handled Year x 23,400,462 = $4,446,087.78 2005 x 27,612,545 = $5,246,383.55 2006 x 31,202,176 = $5,928,413.44 2007 = $15,620,884.77 = $15,620,884.77 + $17,341,391.34 = `$32,962,276.1 Option 2 – Build New Hartford DC Fixed costs Old DC Fixed cost + New DC Fixed cost = $0.20 x 20,348,228 = $4,069,645.60 Old DC Fixed costs = $4,069,645.60 x 3 years = $12,208,936.80 New DC Fixed costs = $4,069,645.60 x 3 years = $12,208,936.80 Total Fixed costs = $12,208,936.80 + $12,208,936.80 = $24,417,873.60 Variable costs Same as in Option 1 = $15,620,844.77 Total Cost of
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