GC 30203

Logistics Management

SEMESTER 2 2019/2020

Case Study 1.1

PREPARED BY:

Name TAN WEE ZHANG

Matrix Number BG 17160465

1. List and discuss the advantages and disadvantages of purchasing a two-wheeled
trailer for each store to use for delivering Super Gyms.
The advantages of purchasing a two-wheeled trailer for each of the stores to use for
delivering Super Gyms are none at the moment because the bumpers on the newest
autos cannot accommodate the trailer hitches, therefore, the two-wheeled trailers
could not be used. The disadvantages of purchasing of each trailer for each store is
the enormous price of 1800.00 per trailer, 250.00 per store for adequate bumper
hitches, and an additional 50.00 per year for licensing, and insurance, for an item that
wouldn’t work to start with. To cover all 70 stores this is a total of 14,700.00 that would
be spent, as well as each customer would have a delivery charge of 368.00 to have
them delivered.

2. List and discuss the advantages and disadvantages of having local trucking
companies deliver the Super Gym from the retail store to customers.
The advantages of having local trucking is a great price of 38.21, rounded to a flat
charge of 40.00 per set within a 25-mile radius of the store, with an additional 1.50 per
mile beyond 25 miles. With 85% of the customers living within that area, that would
cover a good percentage of the customers at a reasonable price. Most delivery
companies normally deliver twice a week and not daily, so that could be a customer
service issue. Another disadvantage would be to have to decide by Monday, so
advertisement would have time to include the delivery charge in the Spring-Summer
brochure. IF the store absorbs the delivery price, it will have to be accounted for in the
price of the set. But that would be good customer service on the stores part. If the
customer has to absorb the cost, it would be a disadvantage for the customer, but,
most stores charge delivery charges, so as long as it is clearly stated on the
advertising of the gym, then, they could make the decision if they could afford it or not.

3. List and discuss the advantages and disadvantages of stocking Super Gyms at
the distribution centers and then having the truck that makes deliveries from the
distribution center to the retail stores also make deliveries of Super Gyms to
individual customers.
Stocking the gym at the warehouse would take up a lot of space. A disadvantage
would be delivering it by the large trucks. Another disadvantage is the customer
never seemed to get the correct three boxes delivered, as the set requires. Trying to
squeeze an 18-wheeler into the subdivisions. Every time they try, they knock down a
couple of mailboxes and leave truck tracks in the homeowner’s lawn. The
advantages of stocking the Super gym at distribution centers and let them deliver it
to the customer is that KiddieLand doesn’t have to stock the products in their shops,
which reduces the logistics and reduces costs of holding a stock
4. List and discuss the advantages and disadvantages of charging customers for
home delivery if they are unable to carry home the Super Gym.
The advantages of charging customers for home delivery are customer satisfaction
as the customer do not have to worry about taking the product home the same day.
Moreover, it also can savings in delivery costs as that charge will not be applied to
KiddieLand. The disadvantages of charging customers for home delivery are
customer dissatisfaction as they will have to pay for more in the product. Next,
shipping is not guaranteed to deliver the Super Gym to the customer’s house.

5. Which alternative would you prefer? Why?

I would choose the alternative that charges the customer for home delivery. I would
choose this option, as we could employ the local trucking company since a clear
majority (85%) of their customer base live within 25 miles of a store, this alternative
will cut costs down the best in the long run while allowing for the least amount of risk
for the employees and customers as the set is almost 500 lbs.

6. Draft a brief statement (catalog copy) to be inserted in the firm’s spring-summer

brochure that clearly explains to potential customers the policy you recommended in
question 5.
The Super Gym is provided unassembled inside three boxes each weighing 150 lbs.
For assembling, instructions will be provided in each box, as well as an option for
help from the KiddieLand staff specified for the Super Gym, and/or our local delivery
team. We are looking forward toward any feedback that you may have. Thank You.

7. In the first meeting, A.J. asked about SUVs, but there was no further mention of
them. How would you follow up on his query?
SUVs are designed with extra space for storage than most automobiles, especially in
the united states. Since a large section of our customer base brings a SUV to the
KiddieLand store, we should consider how we can utilize their space for a bigger
sale with the Super Gym.