MID TERM PROC 5850 Logistics 1. KLF Electronics is an American manufacturer of electronic equipment. The company has a single manufacturing facility in San Jose California. (20 points) KLF Electronics distributes its products through five regional warehouses located in Atlanta, Boston, Chicago, Dallas, and Los Angeles. In the current distribution system, the United States is partitioned into five major markets, each of which is served by a single regional warehouse. Customers, typically retail outlets, receive items directly from the regional warehouses in their market area. That is, in the current distribution system, each customer is assigned to a single market and receives deliveries from one regional warehouse. The …show more content…
It will reduce the facility cost of the company. The safety stock required in centralized system is also less. It will also reduce the inbound transportation costs. The disadvantages of such a system are that the lead time will increase and it will become difficult for all the customers to easily approach a single warehouse. The activities will become complex and the outbound transportation cost will increase. 2. As the Purchasing Manager in a manufacturing firm, you would be expected to identify and know various aspects related to transportation/traffic in order to effectively perform your job. Today, during the staff meeting, your boss asked you for advice on two aspects of transportations: (20 points) a. What are the major considerations when handling materials? i. Discuss the following: 1. Load Unitization, 2. Space Layout, 3. Storage Equipment Choices, and 4. Movement Equipment Choices. There are various considerations while handling the materials and care should be taken, while working over this activity. The following things need to be considered: Load Unitization: This is an important factor of consideration for material handling. Load unitization is the packaging and arranging of the item or items in a particular manner that can be handled as a unit. It should be considered that the items are banded in a securable manner. In this, the physical packaging of the
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Increase revenue and growth. One of the biggest benefits is reduction in inventory and personnel cost due to integrated systems. Improving the competitive environment with better information visibility. This will help employees and managers make decisions faster. Improve operational efficiency with better business processes that focusses on organizational goals. Is less time consuming for employees by using EDI systems to exchange data within divisions and suppliers. This will add value for it will be in real time, you will be able to see the inventory in all locations. The data information can be used to negotiate agreements and contracts with suppliers to reduce costs. Also organize the deliveries by location in order to maximize logistics associated with the orders.
Innovations in transportation and telecommunications have introduced a number of opportunities for companies of all sizes and types to optimize their transportation networks. This paper provides a description concerning the design of a logistics network that consists of only one warehouse. A discussion concerning what steps will need to taken in order to design the optimal network is followed by a description of the information and data that is needed to make this determination. Finally, an assessment of the strategy will be employed in this network is followed by a summary of the research and important findings concerning these issues in the conclusion.
Answer 2- If there should be a single location for all three companies the inventory holding cost will reduce because the product is placing at one location instead of different three locations. Moreover, by doing this the insurance and misplacing of product of cost reduce but in transit of inventory will increase because the shipments are truck load and the distance between customers and distribution centre is far. Furthermore, with this the service level improved which means order fulfilment process improved too. In addition to this, the
You work in marketing for a company that produces work boots. Quality control has sent you a memo detailing the length of time before the boots wear out under heavy use. They find that the boots wear out in an average of 208 days, but the exact amount of time varies, following a normal distribution with a standard
Reduced need for higher capacity at the supplier. This would be reduced because suppliers would not need to size their operations to deliver on the “one shot large volume order” and would be able to space these in time with orders at
1. You recently retired from government contracting work and established a consulting company (fully consistent with government ethics laws and rules, of course) with the primary focus of advising potential government contractors and subcontractors. Mr. Johnny Jones, of The Johnny Jones Flooring and Construction Company has approached you with a question. Jones and his company are potential subcontractors (they, obviously, specialize in flooring) on a federal construction contract worth a little over two million dollars ($ 2,000,000.00) recently awarded to the Jimmy Smith Construction Company (Jimmy Smith, the prime contractor). Neither Johnny nor his company have ever been part of a government contract
* Loads were picked up from location A and delivered to one of 5 warehouses, placed on another truck with optimized route for location B (software driven route optimization)
I think that when everyone uses the same system, no matter what cultural differences there are, that the direct distribution system would work better. This would also help to better manage worldwide inventories.
The amount of work in progress is minimized. Fewer tools are needed. The parts do not have to travel between the work stations. The control systems becomes redundant, everything takes place in the garage.
With the same inventory levels, whether in a store or in a warehouse, the warehouse can drive the cost of this up, beyond that of in a store. Service charges are a cause of this inflated cost. The advantage the warehouse option has here, is there is plenty of space available to keep extra inventory versus what a store can hold, to guarantee a cushion of product in order to fill any customer demands. Also, centralizing stock allows easier monitoring of the stock levels for different products and due to service levels implemented in a warehouse, inventory checks can be easier in the warehouse.
The advantages of a centralized warehouse is higher service levels and lower inventory holding costs due to aggregating customer demand and pooling risk. That is, if customer demand is high in one region and lower in another, there will be no need to hold excess inventory in a regional warehouse; the variation in demand will balance out and reduce the requirements for excess inventory. Additionally, the fixed costs of maintaining one central warehouse/distribution center will be lower than five regional warehouses.
Because the product was leaving the warehouse and getting to stores quicker, I was able to reduce the storage space which was an initial problem so the increase of costs because of it decreased. The stores showed a moderate increase in profit.