Problem 1: KLF Electronics is an American manufacturer of electronic equipment. The company has a single manufacturing facility in San Jose California.
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 warehouses receive items from the manufacturing facility, Typically, it takes about two weeks to satisfy an order placed by any of the regional warehouses. In recent years, KLF has seen a significant increase in competition and huge pressure from their customers to improve service levels and reduce costs. To improve service level and reduce costs, KLF would like to consider an alternative distribution strategy in which the five regional warehouses are replaced with a single, central warehouse that will be in charge of all customer orders.
Part A: Describe how you would design a new logistics network consisting of only a single warehouse.
Part B: Provide an outline of such an analysis; what are the main steps?
Part C: Specifically, what data would you need?
Part D: What are the advantages and disadvantages of the newly suggested distribution strategy relative to the existing distribution strategy?
Problem 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:
a. What are the major considerations when handling materials?
Discuss the following:
1. Load Unitization,
2. Space Layout,
3. Storage Equipment Choices, and
4. Movement Equipment Choices.
b. What legal forms of transportation are available to the company?
i. Identify the legal forms of transportation.
ii. Discuss the legal forms of transportation.
iii. Provide one example for each legal form of transportation.
Problem 3. Consider the supply chain for breakfast cereal. Discuss the competing objectives of the farmers who make the raw materials, the manufacturing division of the company that makes the cereal, the logistics division of the company that makes the cereal, the marketing division of the company that make the cereal, the distribution arm of the grocery chain that sells the cereal, and the manager of the individual grocery store that sells the cereal.
Problem 4. You have been called in as a consultant to a large drugstore chain which has 24,000 inventory line items. Explain how inventory classification could help this company to better control its inventory.
Problem 5. Discuss how each of the following helps to alleviate the bullwhip effect:
a. E-Commerce and the Internet
b. Express Delivery
c. Collaborative forecasts
d. Everyday low pricing
e. Vendor-managed inventory