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Distribution Strategies - Discount Store

Discussion Questions
1. Consider a large discount store. Discuss some products and suppliers for which the discount store should use a cross-docking strategy; some products and suppliers better suited to a direct-shipment strategy; and, finally, some products and suppliers for which the discount store should utilize a change to; "traditional warehousing strategy."
2. Consider the following supply chains. For each one, list specific advantages of centralized and decentralized management, and centralized and local facilities:
a. Milk and dairy products
b. Newspapers
c. MP3 players
d. Cars
e. Jeans
3. What companies or supply chains can you think of that use an inventory pooling strategy?
4. What companies or supply chains can you think of that use transshipment strategies?

Please do not use the answers from this web page for question 1 and 2. It's the same answers from the teacher text book.
http://ieor.berkeley.edu/~kaminsky/ieor153/hw7sol.html

Solution Preview

1.

The Cross-docking strategy refers to the process of accelerating the flow of product from the receiving end to the shipping end with a minimum of handling work in between. It is gaining significant importance in the logistic operations of a discount store (Ramaswamy & Namakumari, 2005). The best products for which this strategy could be applied, display high levels of predictability, popularity, and cube movement.

Suppliers that have their own Direct Channels possess a distinct advantage in terms of cross docking (Cross Docking: Bypassing Storage, 2008). The products for which cross-docking could be implemented by the discount store include perishable products that require immediate shipment, high-quality items that do not require extensive quality checks during receipt, products that are pre-tagged, pre-ticketed, and ready for sale, products with continuous and consistent demand, such as "staple" items like milk and toilet paper; product moving from one retail store to another and back-ordered items.

These include fruits and vegetables, wheat, milk, toilet paper, etc. The suppliers who operate independently with their own fleet delivering products to customers are better suited to direct shipment strategy. The products which could be supplied through direct shipment include wine and soft drinks. For the suppliers manufacturing non-perishable goods such as furniture, toiletries, electronic gadgets etc., the discount store should utilize a modified ...

Solution Summary

The solution gives 916 words on which products and services will use the cross docking strategy, direct shipment strategy or traditional warehousing strategy, as well as the importance of decentralized and centralized management and inventory pooling and transshipment. 3 references included.

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