Question

1. Read the examples below, and specify which mode you would recommend. If you choose intermodal, specify the combination of modes that you would use.

Alternative Scenarios:

Coal (over 1000 miles, same land mass)

Human organs used for transplant within the same country/continent (over 1000 miles)

Tens of thousands of pounds of grain used for production of beer (over 1000 miles)

5,000 lbs. (2271 kilos) specialized parts used in manufacturing equipment (average value)

2. When designing a network of distribution centers to serve a large market, like the U.S., it is common to debate the number of facilities to use. Discuss the following.
   • What arguments would you use to support having many facilities? What assumptions did you make to support your analysis?
   • What arguments would you use to support having fewer facilities? What assumptions did you make?
   • Which business functions (departments) are likely to support each of these positions (i.e., having more or fewer facilities)?

How does the availability of third-party providers influence your decision?

Answer 1

Coal (over 1000 miles, same landmass)

If we choose to transfer coal by using intermodal transport, we can choose to transfer first by truck from the colliery and then by rail to the destination and then again loaded in the truck to the ultimate destination as it is on the same landmass. In this multiple contracts are made as the things are transferred from one mode to another mode of transport.

Human organs used for transplant within the same country/continent (over 1000 miles)

This requires the fastest mode of transportation with a single contract. So, for this, I will choose a multimodal way of transportation. An air-conditioned truck will pick up the organs and will transfer the organs to the airport and by air cargo, the organs will reach the destination and by truck will be transferred to the respective hospital.

Tens of thousands of pounds of grain used for the production of beer (over 1000 miles)

This will use a multimodal way of transportation since the goods are bulky and have to be transported using a single contract. Firstly the grains will be transported by truck to the railway station and then again by truck to the destination.

5,000 lbs. (2271 kilos) specialized parts used in manufacturing equipment (average value)

For transferring this, again multimodal mode will be used for transportation ie. under a single agreement. The trucks can be used to transfer these bulky parts to the destination as its loading and unloading are quite difficult and only one mode of transport will be used.

What arguments would you use to support having many facilities? What assumptions did you make to support your analysis?

A distribution channel is a series of facilities used for storing and transporting the goods from the persons manufacturing the goods to the final customers. It can have many facilities as well as fewer facilities also. The number of facilities ina channel depends upon various factors but the most important of them is the product's delivery time. The arguments that I will say for having many facilities are-

1. The customer will have to wait for a larger time to get the ordered items.

2. The transportation cost will be less

The assumption for doing this is that the customer wants a fast delivery of the products. The second assumption can be that there is bulk transportation of products.

What arguments will support less facility?

For the distribution channel having less facility, the arguments are

1. Customer needs the things immediately

2. The transportation will happen at a distant place.

The assumption for doing this is that the customers are in a hurry. The goods are perishable.

Which business functions (departments) are likely to support each of these positions (i.e., having more or fewer facilities)?

How does the availability of third-party providers influence your decision?

The business dealing in perishable items require less facility like vegetables, fruits e.t.c. The business dealing in manufacturing parts e.t.c. can have more facilities. A third-party provider can influence the number of facilities as they can serve as intermediate facilities between the trans partition of goods. These more or lesser facilities are used for -intermediate business function - less and for raw materials it is more .They may provide suitable facilities for storage for a charge and that will increase the cost.