Question

Identify an example company and 2 impacts on cost and 2 impacts on service for the following types of distribution networks:

-Manufacturer Storage with Direct Shipping

-Manufacturer Storage with Direct Shipping and In-Transit Merge

-Distributor Storage with Carrier Delivery

-Distributor Storage with Last-Mile Delivery

-Manufacturer or Distributor Storage with Customer Pickup

-Retailer Storage with Customer Pickup

-E-Business

Answer 1

► Manufacture Storage with Direct Shipping

In this method or option manufacturer shipping their products directly to the customers. Here there is no intermediaries like wholesaler and retailer. All stocks are kept with the manufacturer.

Impacts on Cost

There are many costs impact in transportation for carrier who transports the goods and also for the manufacturer or the shipper who wants goods are transported. Various cost factors are Cost related to vehicle, Trip cost, Operating Cost et.

Inventory Cost – Lower cost because of aggregation low demand high value and Customization of product can be postponed.

Transportation Cost– Cost is high because of longer distance and multiple shipping

Facilities Cost – Facilities cost is lower in direct shipping

Handling cost – If small consignment can be managed, the handling cost can also lower.

Impacts on Services

In manufacturing storage with direct shipping, services will get better response on time and can improve the services by the direct response from the customer. Following are the impacts

Availability of Product – By providing availability of product as and when the customer needed may indicate high level service

Response Time – Response time is very high level and the product can directly evaluated by the costumer.

Experience of the Customer – Customers may experience partial or improper shipment delivery from various suppliers

Visibility or Transparency - In direct shipping the customers are mostly like to visible their shipment and they are giving more importance to the product.

Return or Refund – In direct shipping it is very difficult to adapt the return facility.

► Manufacture Storage with Direct Shipping and In-Transit Merge

In this shipping, products of the orders from different locations will merge and deliver as a single delivery to the costumers. Example, if a costumer orders a Asus PC along with a Samsung Monitor, the items picks from the Asus manufacturer and item picks from the Samsung manufacturer merges together and deliver the whole item as a single delivery to the costumer.

Impacts on Cost

Inventory Cost – It is similar to direct shipping or drop shipping

Transportation Cost – Lower cost than Direct Shipping

Facilities Cost – Cost Lowers at Customers in in transit merger

Handling Cost – Handling costs are higher than Direct Shipping

Information Cost – Investment is higher

Impacts of Service

Response Time – Similar to Direct Shipping
Variety of Product – Similar to Direct Shipping
Product availability – It is higher as direct shipping
Customer Experience - It is higher experience by customers than direct shipping
Order Visibility and Return – Same as direct shipping