Question

can you please give me short answers only 4 or 5 sentence and please could you tpye the answers i do not want handwriting,,,

You are creating a model for a manufacturing company with four major plants and ten warehouses. They want to reduce costs by determining the optimal number and location of the plants and warehouses. During the initial set of meetings, one of the team members is very concerned about modeling the “samples” that the firm sends out. As part of the marketing of the product, the firm sends out quite a bit of sample product. This product is pulled from the plants or warehouses and shipped to customers via small-parcel. It accounts for about 10% of the demand records (and about 0.5% of the demand volume) and about 3% of the logistics costs. Should you include this part of the business in the model?

Answer 1

I think this forms a significant factor for the rising costs that the Manufacturing Company is incurring in the business. If this part of the operation is not taken care of, then the pressure upon plant capacity utilization and warehouses, shall continue to concern the Company. A reduction in the ‘sample cost’ would impact the demand records and volume in the sense that lesser volumes are to be manufactured, to be distributed as ‘Free samples’. Moreover, the Plant shall be able to produce more such products for selling that could generate direct revenues for the Company rather than awaiting for a positive responses from the other party’s end. Having said that, the samples are not supposed to be so less in number that it may leave the other party in confusion as to whether the Order should be placed with this manufacturing Company or not. The sample size needs to be deliberated upon before reducing the same and be certainly included in this part of the Business model that is concerned with the optimization of plant and warehouses numbers and location.