Arab Academy for Science and Technology

Course Name: Logistics And Supply Chain Management In Sme's_5826

Dr. Dr. Hebat Allah El-Messmary
Name: Mohamed Essam El-abd
Reg.no: 21125786

Dear Dr. Heba

I hope this text find you well . Asper your permission & generosity to give me chance
to submit my case study today.
Please find out my case study solution below.

I appreciate your support & generosity.

Best Regards,

M.El-abd
 1. List and discuss the advantages and disadvantages of purchasing a two-wheel trailer
for each store to use for delivering the Super Gyms.
Answer:
Advantages Disadvantages
 Kiddie land could do its own deliveries  The investment is very high, trailers incur
saving the company some money, and this licensing costs, insurance, proper selection
investment could lead in to a strategy to of bumper couplings, etc.
cheaper and faster distribution, if the product  With the high cost of trailers, there will be a
becomes a success. large loss of gross margin, especially if
 In the long turn, the trailer can be used to the product fails.
other deliveries or processes within the  There may be some damage to trailers due
company. to misuse, causing the company to pay a
 They also can rent or sale the trailer if there deductible to correct them and increase the
is not more demand on its use in the price of insurance.
company for cutting cost.  Costs related to deliveries translate into a
loss of gross margin from product profits.

2. List and discuss the advantages and disadvantages of having local trucking
companies deliver the Super Gym from the retail stores to the customers.
Answer:
Advantages Disadvantages
 According to market research 85% of the  Local companies that were found prefer
customers drive less than 25 minutes to the deliveries twice a week but not daily as
store, so with the flat rate of $40 per shipment demand might require
it would be cheaper to deliver for the  Price fluctuation in future due de economic
company factors like oil prices hike, tools etc. May
 No initial investment. lead to increase in cost of distribution using
this option.
 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.
Answer:
Advantages Disadvantages
 Consolidating and sending more than one  Burn a lot of fuel with double deliveries to
delivery to the retailer or customer equals the distribution center and then to retail
less travel. stores
 Squeezing an 18-wheeler in a subdivision
would not be ideal
 Risk of knocking over some mailboxes and
truck tracks on some owner's lawns
during deliveries

4. List and discuss the advantages and disadvantages of charging customers for home
delivery if they are unable to carry home the Super Gym.
Answer:
Advantages Disadvantages
 Charging customers for delivery would  Existing customers do not pay shipping
absorb the cost of $40 for delivery per set. costs, they may not agree or been unsatisfied
 Convenient for those who do not own an  The loss of customers
SUV.

5. Which alternative would you prefer? Why?

Answer:
 I prefer the fourth alternative - Charge for Delivery if the customer cannot get Super
Gym home for the following reasons:

 Significant reduction in cost by giving the delivery cost to customer.

 Profit margin not affected by transportation costs.
 As customer need not drive to the retailer stores (save time and cost involved in
drive of approx. 25minutes), they would rather pay the delivery cost, which is
mentioned upfront along with the product price.
 Customer can order products on phone/internet and get comfortable home delivery

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.
Answer:

 Sell price (Pickup only) $715

 Doorstep Delivery Charges (Additional) $40
 Total (including delivery) $755 If opted Doorstep Delivery

7. At the first meeting, A. J. asked about SUV s, but there was no further mention of them.
How would you follow up on his query?
Answer:
Advantages Disadvantages
 More than half of customers owned a SUV.  It can be unpleasant, difficult or tedious to
 SUVs are usually big in size, so they can load/unload the 3 heavy packages of Super
easily accommodate 3 packages weighing Gym from the SUV.
450 pounds of Super Gym.  Loading SUV with such bulky and heavy
 Some SUVs have hitches, so a trailer can packages can impose a challenge driver's
also be attached to them. (customer's) safety.