UNIVERSITY TECHNOLOGY OF MARA
THE BIS CORPORATION
RAJA FARISHA FATIMAH BINTI RAJA HISHAMUDDIN
NAWAL AMANI BINTI ABDUL RASHID
SITI AISYAH BINTI MOHD YASIN
ZULFAHRINA BINTI MOHAMED HAZRI
Should Bis switch from the current distribution network to two-tier logistics network? How many primary and secondary distribution centers should be established and where should they be located? A single-tier network is where all products are shipped from the plants to the warehouse. From the observation made in the analysis, the single-tier network causes low truck utilization and high transportation cost. Assumed location of production is in USA.
Total states in USA = 50, divided by 4 zones. So each zone contains approximately 12 states. As states above, there are 8 manufacturing plants. So we can assume that each zone consists of 2 manufacturing plants. 17 warehouses is distributed with 3 zones contain 4 warehouses each and 1 zone with 5 warehouses. Each manufacturing plant is connected by 2 warehouses and each warehouse serve 3 states. Each state contains about 11 retail zones (550 zones ÷ 50 states). As a result, one warehouse has to serve 33 retail zones! So it is difficult to serve all 3 states (33 retail zones) from only one warehouse with high satisfaction level of customer service. We as the consultant has suggested two-tier distribution network that include primary and secondary warehouse. •
The primary warehouse will receive products from the plants and transfer inventory to secondary warehouse. •
The secondary warehouse will serve the retail outlet.
Bis Corporation can establish 34 secondary warehouses (each primary warehouse contains 2 secondary warehouses). So the total of warehouses are 51 (17 primary warehouses + 34 secondary warehouses). So on average, each state will get one warehouse. The primary warehouse is relatively small, it can potentially allow for...
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