Case Study

Case Study

1. What impact would the three new alternatives have on transfer and customer freight costs? Why?

2. What impact would warehouse consolidation have on inventory carrying costs, customer service levels, and order fill rate?

3. How are warehousing costs affected by the decisions to use third party or private warehouse facilities? What effect would this have on handling, storage, and fixed facility costs.

4. What effect would shipping mixed shipments from consolidated distribution centers have on individual company cost and performance?

5. Evaluate the eight supply chain processes in terms of customer classification and degree of centralization/decentralization of required functionality (use matrix on page 459).

6. Given all available information, briefly describe the logistical system design you would recommend for Westminster’s integrated consumer products.

Case Study, #4 Questions 1-3

1. What impact would the three new alternatives have on transfer and customer freight costs? Why?

The three new alternatives would help minimize the costs of transfer and customer freight costs. By using information data collected from customers the company will be able to ensure timely inventory replenishment and focus production on actual numbers rather than forecasted numbers. This will eliminate any unnecessary production or over production which in turn will minimize distribution costs. By consolidating systems costs can also be minimized because there are fewer facilities to maintain.

2. What impact would warehouse consolidation have on inventory carrying costs, customer service levels and order fill rate?

Warehouse consolidation would reduce inventory carrying costs. This occurs because facility space will be utilized more efficiently which in turn will eliminate unnecessary work. Westminster currently operates three domestic consumer sales companies with several distribution centers under each. Company A and Company C have warehouses in...