Task Type: Individual Project Deliverable Length: 1,200 words Due Date: 6/14/2015Key AssignmentThe assignment must be a completed paper, with APA formatting,all sections complete (using Roman numerals of each section per the outline),references, and good grammar.You were recently hired as the VP of Logistics for the ABCManufacturing Company. This is a new position. During the lengthy interviewprocess, the CEO shared her strategic plans for worldwide growth in thecompany’s consumer sales. Previously, sales had been confined to domesticsales only. As a result of little staff logistics expertise, the company hadkept the traditional logistics model of shipping all finished products fromits warehouse and factory location on the East Coast of the United States,even though there was a growing market on the West Coast that competition wasserving from a West Coast warehouse. However, the CEO pointed out thatdespite its national popularity from a feature and quality perspective, itseemed to penetrate poorly on the West Coast because of her need to chargehigher prices as the result of higher shipping costs.The marketing manager tried to mitigate this competitivedisadvantage by freight equalization so that end customers would pay the sameamount of shipping costs as West Coast competition charged, regardless of wherethey were located. This met with some insignificant success becausetimeliness of delivery was another important issue. Therefore, the CEO hadasked you, as your first assignment, to write a white paper to address thefollowing specific points. She remembered that you had quite a bit ofexperience addressing some or all of these issues during your career. As astickler for formatting, she has specifically asked you to use the followingRoman numeral sections and headings in the paper:Section I: Introduction (200 words)Ingeneral, what are the qualitative pros and cons for domestic sales ofhaving multiple distribution centers and shipping locations in theUnited States?Section II: Decision-Making Criteria (300 words)The CEO is considering three options with the same totalconstruction and operating costs: expanding the warehouse next to the EastCoast manufacturing plant; building a West Coast distribution center; orbuilding a combination manufacturing and warehouse location on the West CoastGiven the following general information, what are at least 5 criteria thatmust be considered when locating a new or expanded shipping warehousedomestically?Theproducts are primarily medium- and large-size insulated coolers, likeyou might use for a picnic or trip to the beach. Transportation firmscharge by space, or cubic feet, rather than weight, which is the morenormal method.Thecoolers are made of 3 components, which are all produced bysuppliers solely on the East Coast; the raw materials to make thisproduct are bulky, and inbound shipping from the East Coast supplierscurrently represents 20% of total raw material costs.Themarket is very competitive with generally stable or decreasingmarketplace prices.Instates that are warm year-round, sales are pretty steady; in states thathave seasons, 90% of sales occur in the May–August period.Rightnow, to keep West Coast customers happy, the CEO says that they onlycharge those customers the local freight cost of shipping, which is $200for anything up to half a truckload.Section III: Metrics to Assess Success (250 words)Describe3 metrics that you would use to assess the success of any logistics planinvolving you as a manufacturer and a mass merchandiser. Provide supportfor your selections.Section IV: Qualitative Factors (200 words)Identify 3 subjective, qualitative factors to consider in therecommendation.Section V: Quantitative Factors (Excel Spreadsheet)Provide a detailed recommendation as to whether you should opena West Coast distribution center, add on to the existing East Coast factoryand warehouse, or build a combination West Coast manufacturing location andwarehouse? Your response must be quantitatively based using the data insection II, the additional data below, and from external resources as needed.Use this template to show your numeric calculations. Withoutcalculations shown for how you reached your conclusion, section V will earn 0points. REMEMBER: Decisions like this are based on a comparison of option Aversus current methods, or option B versus current methods.Theproducts are primarily medium- and large-size insulated coolers, likeyou might use for a picnic or trip to the beach. Each cooler occupies 2cubic feet of trailer truck space; trailers are 10 x 10 x 40’ long and cost$1,000 to ship from the East Coast to the West Coast.Thecoolers are made of 3 components: 1 lb of raw material A, 1/4 lb of rawmaterial B, and 1 gallon of material C, weighing 10 lbs. Based on thisinformation, the added freight cost to get raw materials to a West Coastmanufacturing location would be $0.20, $0.20, and $0.60 perfinished-good unit, respectively.Themass merchandiser location on the West Coast will be purchasing 10,000units per week, but in lots of only 1,000 at a time because of theirretail store space constraints.Themarket is very competitive, with generally stable or decreasingmarketplace prices.Instates that are warm year-round, sales are pretty steady In states thathave seasons, 90% of sales occur in the May–August period.Theraw materials to make this product are bulky, and inbound shipping fromthe suppliers to the manufacturing plant represents 20% of total rawmaterial costs. These raw materials are supplied in the United Statesfrom the East Coast; they are not available elsewhere.Inthe past, to keep West Coast customers happy, the CEO agreed to freight equalizescustomer shipping charges to be competitive with West Coast competition.She says that they only charge those customers the local freight cost ofshipping, which is $200 per delivery for anything up to half-truckloadquantities.Section VI: Conclusion (200 words)What are the 3 most important points that you want the CEO tounderstand about this entire decision-making process?**Provide citations and references tosupport your information.**http://hbswk.hbs.edu/archive/1811.htmlhttps://cscmp.org/http://people.hofstra.edu/geotrans/eng/ch5en/conc5en/ch5c4en.htmlhttp://www.logisticsmgmt.com/http://www.freight-calculator.com/apxocean.asphttp://www.crfonline.org/orc/cro/cro-9-1.htmlhttp://dataweb.usitc.gov/
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