Lesson 7 Assessment - Distribution operation PDF

Preview

Summary

Distribution operation ...

Description

Lesson 7 Assessment – 25 marks True/False (10 marks) 1. Inventory handling, storage, and processing facilities help supply chains create time and place utility. TRUE 2. Organizations may benefit substantially from the establishment of one or several warehouses to reduce transportation costs. TRUE 3. One of the primary tradeoffs in DC design is equipment versus space. TRUE 4. Hourly labor is a problem for distribution centers. FALSE 5. When establishing a distribution strategy, the first and most obvious consideration is the product. TRUE 6. Cross docks typically increase transportation costs. FALSE 7. The drawback of centralized inventory is the long distance to customers, which typically produces longer lead times and higher transportation costs. TRUE 8. Slotting is defined as the placement of product in a facility for the purpose of optimizing materials handling and space efficiency. TRUE 9. KPIs cannot be used in connection with distribution center activities as they do not provide relevant data. FALSE 10. Asset utilization is very important in a 3PL warehouse. FALSE

Short Answer (15 marks) Refer to the discussion on warehouse layout from this lesson. Explain how a warehouse layout for retailer Amazon would differ from that of repair parts for a machinery manufacturer Caterpillar. What factors would be similar and what factors would be different. Explain the differences.

Warehouse designers must work with a space in which certain factors limit the surface area available. Therefore, the layout has to be carefully planned. When deciding on the internal and external layout of a warehouse, there are three possible scenarios that could necessitate a different assignment of space: the installation of new warehouses, the extension of existing facilities and the reorganization of those currently operating. Even though the last of these

options does not involve making extremely important decisions that will affect the development of the business over the medium- to long-term. In Amazon example, the warehouse is a distribution center that connect the sellers to buyers by online platform. Also, this essentially monetized its incredible logistics network so that small business owners could benefit from the network of a big corporation without the difficulties of a big corporation. While they may have their own backrooms, their major products are stored in a warehouse space that they lease or rent. To fulfill orders, third-party transportation companies ship the goods to customers or to the companies’ retail stores. However, the machinery manufacturer Caterpillar has a warehouse with specific parts from a specific manufacturer for each type of it. The difference between them is that in Ecommerce environment, as most retailers have multiple suppliers and merchandise that can be easily substituted, the supplier capacities can be considered unconstrained. Same goes for the transportation capacities, as more carriers can be added on routes where required. That leaves the warehousing storage constraints as the only real constraint, but even these are seldom modeled in retail chains. On the other hand, in Manufacturing environment, manufacturing chains are constrained by manufacturing capacity – (available resources, time, skills, etc.) and this is necessary that must be formed for feasible planning. As a result, ecommerce sector primarily consists of propagating demand through the supply chain tiers largely unconstrained, with only the inventory levels having been modeled. The latter adequately address the need to maintain the required service levels. In contrast, the manufacturing sector consists of propagating demand through the supply chain tiers constrained by the manufacturing capacity (the capacity of required resource, skill, and material) at each node, in addition to the inventory levels that must be maintained for sustaining the required service levels....