Merloni Case

2819 WordsAug 21, 201312 Pages
Case Analysis On Merloni Elettrodomestici Spa Economics Essay Merloni Elettrodomestici SpA is an Italian company based in Fabriano and is one of Europe’s biggest makers of home appliances. In February 2005, Merloni Elettrodomestici was renamed Indesit Company, Indesit being the best known of the Group’s brands outside Italy. The Company was also operating under its “historic” brand, Ariston, and the regional brands Hotpoint, Scholtes and Stinol. During the perio from 1984 to 1986, Merloni undertook a number of initiatives to improve efficiency in inventory control and logistics. One such initiative was the transit point experiment where in the Milano region, regional distribution centre was eliminated in favour of tranit points which…show more content…
- (A2) Using the Transit Point methodology, zero inventory is maintained. Therefore, Inventory cost per piece sold = 0 Lire - (B2) Short Haul Transportation Cost The short haul transportation cost is the cost of transporting goods from regional warehouse or transit point to retailers. This cost would be common for both pre and during Transit Point methodoly usage period Short Haul Transportation cost = 4300 Lire/Piece - (A3),(B3) Long Haul Transportation Cost is the cost of transporting goods from the central warehouse to the regional warehouse or transit point. During the pre Transit Point period goods were transported from the central warehouse to the regional warehouses using trailer trucks. Total number of pieces to be shipped per month = 3096 pieces Capacity of one trailer truck = 120 pieces Therefore, Number of trailer trucks required = Total quantity / Capacity of trailer truck = 3096 / 120 = 25.8 trucks Distance between Roma and Fabriano = 165 Km approx. (source: http://www.distance-calculator.co.uk/distance-from-fabriano-to-rome.htm) From Exhibit 11, Cost of using a trailer truck for transport upto 165 Km = 0.36 Million Lire Therefore, Total transporation cost = Cost/Truck x No of trailer trucks = 360000 x 25.8 = 9288000 Lire Transportation cost per piece sold = Total transportation cost / No of pieces sold = 9288000 / 3096 = 3000 Lire - (A4) In Transit Point
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