A company has a single manufacturing facility. It distributes the products through retail stores located in various regions. Which of the following distribution strategies will minimize the company's warehousing costs?
A company has a single manufacturing facility. It distributes the products through retail stores located in various regions. Which of the following distribution strategies will minimize the company's warehousing costs?
Shipping directly from the manufacturing facility to retail locations will minimize the company's warehousing costs. This strategy eliminates the need for intermediate warehousing, thereby cutting costs related to inventory management, warehousing fees, and handling expenses. While it requires efficient logistics to ensure timely deliveries, it is the most effective way to reduce warehousing expenditures.
agree C Shipping directly from the manufacturing facility to retail locations, also known as direct store delivery (DSD), can minimize the company's warehousing costs. This strategy eliminates the need for intermediate warehousing or distribution centers by delivering products straight to the retail stores. As a result, the company can reduce its inventory holding costs, warehouse rental expenses, and other associated costs. However, this approach may require efficient transportation and logistics planning to ensure timely delivery and optimized shipping costs
I think C. It makes more sense to cut the middle man out to save on WH costs.
In a situation where a company has a single manufacturing facility and distributes products through retail stores in various regions, shipping directly from the manufacturing facility to retail locations can minimize the company's warehousing costs. This is because it eliminates the need for additional warehousing facilities, such as regional warehouses or third-party logistics (3PL) providers, which may incur warehousing costs such as inventory holding costs, handling costs, and transportation costs associated with moving products to and from warehouses.
Why it is not "C" ? It should minize warehousing costs...