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Primary Task Response

Primary Task Response

Daniel Kevins

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Task Type: Individual Project

Deliverable Length: 1,200 words

Due Date: 6/14/2015

Key Assignment

The assignment must be a completed paper, with APA formatting,
all sections complete (using Roman numerals of each section per the outline),
references, and good grammar.

You were recently hired as the VP of Logistics for the ABC
Manufacturing Company. This is a new position. During the lengthy interview
process, the CEO shared her strategic plans for worldwide growth in the
company’s consumer sales. Previously, sales had been confined to domestic
sales only. As a result of little staff logistics expertise, the company had
kept the traditional logistics model of shipping all finished products from
its warehouse and factory location on the East Coast of the United States,
even though there was a growing market on the West Coast that competition was
serving from a West Coast warehouse. However, the CEO pointed out that
despite its national popularity from a feature and quality perspective, it
seemed to penetrate poorly on the West Coast because of her need to charge
higher prices as the result of higher shipping costs.

The marketing manager tried to mitigate this competitive
disadvantage by freight equalization so that end customers would pay the same
amount of shipping costs as West Coast competition charged, regardless of where
they were located. This met with some insignificant success because
timeliness of delivery was another important issue. Therefore, the CEO had
asked you, as your first assignment, to write a white paper to address the
following specific points. She remembered that you had quite a bit of
experience addressing some or all of these issues during your career. As a
stickler for formatting, she has specifically asked you to use the following
Roman numeral sections and headings in the paper:

Section I: Introduction (200 words)

In
general, what are the qualitative pros and cons for domestic sales of
having multiple distribution centers and shipping locations in the
United States?

Section II: Decision-Making Criteria (300 words)

The CEO is considering three options with the same total
construction and operating costs: expanding the warehouse next to the East
Coast manufacturing plant; building a West Coast distribution center; or
building a combination manufacturing and warehouse location on the West Coast
Given the following general information, what are at least 5 criteria that
must be considered when locating a new or expanded shipping warehouse
domestically?

The
products are primarily medium- and large-size insulated coolers, like
you might use for a picnic or trip to the beach. Transportation firms
charge by space, or cubic feet, rather than weight, which is the more
normal method.
The
coolers are made of 3 components, which are all produced by
suppliers solely on the East Coast; the raw materials to make this
product are bulky, and inbound shipping from the East Coast suppliers
currently represents 20% of total raw material costs.
The
market is very competitive with generally stable or decreasing
marketplace prices.
In
states that are warm year-round, sales are pretty steady; in states that
have seasons, 90% of sales occur in the May–August period.
Right
now, to keep West Coast customers happy, the CEO says that they only
charge those customers the local freight cost of shipping, which is $200
for anything up to half a truckload.

Section III: Metrics to Assess Success (250 words)

Describe
3 metrics that you would use to assess the success of any logistics plan
involving you as a manufacturer and a mass merchandiser. Provide support
for your selections.

Section IV: Qualitative Factors (200 words)

Identify 3 subjective, qualitative factors to consider in the
recommendation.

Section V: Quantitative Factors (Excel Spreadsheet)

Provide a detailed recommendation as to whether you should open
a West Coast distribution center, add on to the existing East Coast factory
and warehouse, or build a combination West Coast manufacturing location and
warehouse? Your response must be quantitatively based using the data in
section II, the additional data below, and from external resources as needed.

Use this template to show your numeric calculations. Without
calculations shown for how you reached your conclusion, section V will earn 0
points. REMEMBER: Decisions like this are based on a comparison of option A
versus current methods, or option B versus current methods.

The
products are primarily medium- and large-size insulated coolers, like
you might use for a picnic or trip to the beach. Each cooler occupies 2
cubic feet of trailer truck space; trailers are 10 x 10 x 40’ long and cost
$1,000 to ship from the East Coast to the West Coast.
The
coolers are made of 3 components: 1 lb of raw material A, 1/4 lb of raw
material B, and 1 gallon of material C, weighing 10 lbs. Based on this
information, the added freight cost to get raw materials to a West Coast
manufacturing location would be $0.20, $0.20, and $0.60 per
finished-good unit, respectively.
The
mass merchandiser location on the West Coast will be purchasing 10,000
units per week, but in lots of only 1,000 at a time because of their
retail store space constraints.
The
market is very competitive, with generally stable or decreasing
marketplace prices.
In
states that are warm year-round, sales are pretty steady In states that
have seasons, 90% of sales occur in the May–August period.
The
raw materials to make this product are bulky, and inbound shipping from
the suppliers to the manufacturing plant represents 20% of total raw
material costs. These raw materials are supplied in the United States
from the East Coast; they are not available elsewhere.
In
the past, to keep West Coast customers happy, the CEO agreed to freight equalizes
customer shipping charges to be competitive with West Coast competition.
She says that they only charge those customers the local freight cost of
shipping, which is $200 per delivery for anything up to half-truckload
quantities.