Opre 6370 Logistics and Distribution Assignment Two

Topics: Inventory, Warehouse, Costs Pages: 2 (492 words) Published: February 12, 2013
OPRE 6370 Logistics and Distribution
Assignment Two
Sixue (Shawn) Du

Question 1
When comparing performance during the first five months of 2010 with performance in 2009, which warehouse shows the most improvement? Answer
After calculated all of the warehouse costs per unit of every city in 2009 and 2010 which showed on EXHIBIT 3-A and compared them, we found that St. Louis is the only one that shows any improvement, using cost per unit shipped as the performance criterion. The cost for the first five months of 2009 was $9.97, which reduced to $9.07 for the first five months of 2010.

Question 2
When comparing performance during the first five months of 2010 with performance in 2009, which warehouse shows the poorest change in performance? Answer
After calculated all of the warehouse costs per unit of every city in 2009 and 2010 which showed on EXHIBIT 3-A and compared them, we found that the poorest change in performance is the warehouse in Fargo, which is the location of Brant Freezer Company. The costs per unit of Fargo’s warehouse increased 31% from 2009 to 2010.

| 2009| 2010| |
| Average Cost| Average Cost| |
| Five Months| Five Months| Percentage(%) increase|
Atlanta| $8.80| $9.97| 13.3%|
Boston| $9.12| $9.43| 3.4%|
Chicago| $9.00| $9.27| 3.0%|
Denver| $8.56| $10.49| 22.5%|
Fargo| $9.06| $11.95| 31.8%|
Los Angeles| $9.60| $9.88| 2.9%|
Portland| $8.94| $9.26| 3.6%|
St. Louis| $9.97| $9.07| -9.0%|

Question 4
J.Q. is aggressive and is going to recommend that his father cancel the contract with one of the warehouses and give that business to a competing warehouse in the same city. J.Q. feels that when word of this gets around, the other warehouses they use will “shape up.” Which of the seven should J.Q. recommend be dropped? Why? Answer

J.Q. should recommend to drop the warehouse in Denver. Denver has the lowest volume and highest unit costs among all the public warehouses...
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