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Section I: Introduction (200 words) A. In general, what are the qualitative pros and cons for domestic sales of having multiple distribution centers and shipping locations in the United States? B. In general, what are qualitative pros and cons of having one or more international distribution centers for international sales, as opposed to shipping directly from a U.S. manufacturing location warehouse? 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. 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 5 criteria that must be considered when locating a new or expanded shipping warehouse domestically? Internationally? a. 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. b. 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. c. The market is very competitive with generally stable or decreasing marketplace prices. d. 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. e. Domestic demand is expected to increase 5% annually; international demand is expected to increase 15% annually. f. 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. g. The current exchange rate is 1 euro = $1.50. Section III: Metrics to Assess Success (250 words) A. Describe 3 metrics that you would use to assess the success of any logistics plan involving you as a manufacturer and an internationally based 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.
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