Transportation

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Task 1
Dear Manager,

Preliminary Scheduling of the Logistics Services for the Coming Season

Introduction
This report will be focused on the preliminary scheduling of the logistics services for the coming season. The distribution plan will be scheduled by using a mathematical model. Further explanation and discussion will be included.

Background
According to the attached spreadsheet, as shown in the relevant data and information because of the increasing difficulty of the environment, such route from Anke to Gianluigi is very expensive and time-consuming; therefore the route is out of our consideration.

The demand in various customer zones has been changed. First of all, the forecasted demand in Heinz will be reduced by 20% which means the weekly demand of pallets will be dropped from 40 to 20. Also, the demand of pallets in Luca will be increased by 20%, from 55 to 66.

Apart from the original warehouses in Anke and Dino the two third-party warehouses in Eleanor and Florian, the current capacity will be cut and not be sufficient to handle the inventory for the winter 2012 due to the urban renewal program conducted by local government, such that the two third-party warehouses in Eleanor and Florian, are taken into consideration for warehouse relocation.

Mathematical Model
In the following mathematical formulation, some vital parameters are included.

As the total capacity of IMSE is 345 pallets which will is more than the demand of pallets from IMSE to Anke, Dino, Eleanor as well as Florian, therefore, all pallets will be distributed to those four warehouses. In this way, the amount of pallets will be restricted by these warehouses supply. For the demand of six customer regions, Gianluigi, Heinz, Jorge, Konrad, Luca and Matteo, their pallets demand will be fulfilled by the four warehouses.

During the calculation, the amount of pallet is allocated by the combination of the four warehouses and six customer regions. The optimal solutions of the quantity of pallet from four warehouses will be used to determine the handling, operational cost as well as the transportation cost later.

For the handling cost, the number of pallets for each four warehouses will be multiplied with the corresponding handling cost while the operational cost will be equal to the summation of the handling cost and the respective fixed administrative cost for the warehouses. Moreover, the total transportation cost is obtained by the summation of the transportation cost from IMSE to warehouses as well as from those warehouses to customer regions.

Conclusion
To conclude, the optimal number of pallets to be supplied by the warehouses Anke, Dino, Eleanor and Florian, is 96, 50, 95 and 0 respectively and the total cost is $21,580 (Appendix 1) which is the sum of operational cost ($5,190) and transportation cost ($16,390). The cost fulfils the requirements. Obviously, the motion to rent and sign the contract with the third-party warehouses Eleanor is highly recommended. On the contrary, the motion to rent warehouse Florian is not recommended based on the calculation.

Yours sincerely,
Edward Li

For details, please kindly refer to the Appendix 1 for the preliminary scheduling table.

Task 2
Dear Board of Directors,

Report on Potential Acquisition of JK Logistics (JKL)

Background
I.E. Logistics Management (IETM) has continuously improved and expanded its facilities to meet the needs of growing global trade. Recently, one of its competitors, JKL is seeking to sell and windup its business due to great recorded losses. It is time for IETM to consider whether or not to grasp this opportunity to expand its entire operation capacity by acquiring JKL.

This report covers numerous considerations regarding to this potential acquisition, including the pros and cons of the acquisition, preliminary action plan, suggestions and conclusion.

Factors to be considered
A. Necessity of acquisition
The aim of this...
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