Business Finance Homework Help
Business Finance Homework Help. logistics and supply chain
Section II: Decision-Making Criteria (500–750 words)
The CEO is considering either expanding the warehouse next to the East Coast manufacturing plant; or for the same total construction and operating costs, building a West Coast distribution center; or for the same total construction and operating costs, building a combination manufacturing and warehouse location on the West Coast. As a completely separate issue, she is also considering opening a distribution center overseas, to serve the fast-growing warm weather markets of France and Spain.
Given the following general information, what are at least 10 criteria that must be considered when locating a new or expanded shipping warehouse domestically? Internationally?
- The products are primarily medium- and large-size insulated coolers, like you might use for a picnic or trip to the beach. As a result, no matter what mode of shipping is used, 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 market is very competitive with generally stable or decreasing marketplace prices because of this competition.
- In states and countries that are warm year-round, sales are pretty steady; in countries and 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 East Coast suppliers currently represents 20% of total raw material costs.
- Domestic demand is expected to increase 5% annually; international demand is expected to increase 15% annually.
- 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.
- The current exchange rate is 1 euro = $1.50.
Business Finance Homework Help