Kiddie Land and the Super Gym

Kiddieland is a retailer of toys in the Midwest. They have a major issue concerning the logistics surrounding, the delivery of the Super Gym to its customers. The Super Gym costs $715 and weighs 450 pounds total. It is packaged in 3 boxes. The management has to determine the best option for resolving this issue. Five alternatives are reviewed and discussed. They are:

1.) Purchase a two-wheeled trailer for each store

2.) Find a local trucking company that can haul the Super Gym from the KiddieLand store to the customer.

3.) Stock the Super Gym at the two distribution centers and have the truck that makes delivery runs to the retail stores also make home deliveries

4.) Charge for delivery if the customer cannot get the Super Gym home

5.) Negotiate with Super Gym manufacturer to ship directly to the customer.

Each alternative is then reviewed and weighed for the best option. Decisions that are made at one level of the company can adversely impact other areas such as logistics, warehousing, inventory and customer service. Decisions concerning product sales should include a plan for delivery prior to commitments being made concerning purchasing. Oftentimes there is a lack of communication between sales, purchasing and logistics which could end up costing a company a great deal of money. The situation with Kiddieland could have easily turned into a major profit issue for the company.

Answers to discussion questions from chapter (pg 23):

Question 1: List and discuss the advantages and disadvantages of purchasing a two-wheeled trailer for each store to use for delivering Super Gyms.

Because the stores are in a number of states, one would have to check the motor vehicle and insurance requirements of each state. An advantage is that deliveries would be under the control of each store. A disadvantage may be labor costs, especially if two workers are needed to make the delivery. Also, once at the site, the store’s employees might be asked to assist in the...