The Analysis of the Cost in Logistics Distribution of Wal-Mart Supermarket

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The analysis of the cost in logistics distribution of Wal-Mart supermarket

Contents
1.The related concepts of the distribution cost…………………………………………………………1 1.1Definition……………………………………………………………………………………………………….1 1.2 The constitution of the logistics distribution cost………………………………………….1 2.The analysis of factors influencing logistics distribution cost………………………………….1 2.1 The service level of logistics distribution………………………………………………………2 2.2 The rationality of transport vehicle scheduling…………………………………………….2 2.3 Inventory decision…………………………………………………………………………………….….2 3.The example of Wal-Mart Supermarket…………………………………………..…………………….2 3.1The development of Wal-Mart Supermarket and distribution condition……….2 3.2 The successes of Wal-Mart in reducing distribution cost.…………………………….3 4.The operation strategies to control the cost of distribution……………………………………4 5.Conclusion……………………………………………………………………………………………………………..5 Reference………………………………………………………………………………………………………………….6

The analysis of the cost in logistics distribution of Wal-Mart supermarket Logistics, as an important part of the national economy, plays an important role in the modern economy. Distribution is an important part of the enterprise of logistics, and the costs of distribution account for most of the logistics’ costs. This paper first introduces the concept of distribution and the cost structure, and provides people with a basic understanding of this, and then some control strategies have been put forward as the analysis of factors influencing the distribution cost. We can reduce the cost of the distribution by these measures to enhance the competitive edge of the entire company. In this essay, I take the Wal-Mart supermarket as an example to analyze its success in distribution, thus other companies may benefit a lot from their success.

1 The related concepts of the distribution cost
1.1Definition
Rodrigue, Comtois and Slack(2009) said that “logistics distribution is the collective term for the range of activities involved in the movement of goods from points of production to final points of sale and consumption. Physical distribution includes all the functions of movement and handling of goods, particularly transportation services, transshipment and warehousing services, trade, wholesale and, in principle, retail.” While completing the whole process of distribution can result in a large cost, that is the logistics distribution cost. 1.2 The constitution of the logistics distribution cost

According to the elements of distribution pointed by Richey(2007) ,we can conclude that the costs can be divided into four parts: transportation cost, sorting cost, assembling cost and the delivery processing cost.

2 The analysis of factors influencing logistics distribution cost In the whole process of the distribution, there may be many factors influencing the logistics distribution cost. Now I will introduce several ones of them to the readers in the following paragraph. 2.1 The service level of logistics distribution

The cost of logistics distribution may rise proportionally with the improvement of service level. If enterprises do not require high distribution service level of their own, they can choose the cheaper transportation modes, put the goods into the comparative remote and lower storage costs’ warehouses to control the costs; Conversely, If a company’s requirements of the logistics service level are close to perfect degree, corresponding, his logistics cost will also close to the "perfect". Therefore, enterprises should take a serious look at its own positioning and customers’ requirements, and accept the most suitable distribution patterns for themselves. (Chirist,2012) 2.2 The rationality of transport vehicle scheduling

In the enterprise actual operation, the rationality of vehicle scheduling will greatly affect the enterprises’ logistics cost. In the whole logistics operation costs,...
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