logistics case
Question 1
Does MAP understand its transportation needs in a changing environment? What role does transportation play in MAP’s supply chain? How is this role different or the same as other companies (multi-nationals, retail, manufacturing, etc.)?
Answer:
Yes Stanley is aware of the transportation issues plaguing MAP and he is not sure what to do about it.
Role of transportation played in MAP’s supply chain:-
Stanley received multiple calls from customers complaining about late shipments for both truck and rail delays.
Transportation delays were measured in days, not hours. Railcar delivery windows increased from two to seven days, and overall truckload service levels fell to less than 85 percent on time.
Due to rise in price of the transportation cost for MAP the cost of goods sold rose from 11 to 19 percent.
The transportation problems led to a demand by MAP’s largest domestic customer.
Stanley tells that even a 10 percent increase in inventory levels would reduce return on asset levels from 13.7 percent to 9.1 percent. MAP’s inventory investment is 22 percent of total assets and inventory carrying costs are nearing 27 percent of inventory value, both of which are consistent with manufacturing industry norms.
The outbound logistics is an essential primary activity of the value chain no matter what industry.
Question 2
Agricultural commodities and products from the Midwest are shipped to locations around the globe. If global demand continues to grow, how will different transportation modes (rail, truck and barge) be affected? How will these changes impact MAP’s current supply chain strategies?
Answer:
If the global demand continues to grow then there will be a tough time for the agriculture products which is being shipped from the Midwest to all locations around the globe as if there is a rise in demand then costs related with the different means of transportation will increase and the
Does MAP understand its transportation needs in a changing environment? What role does transportation play in MAP’s supply chain? How is this role different or the same as other companies (multi-nationals, retail, manufacturing, etc.)?
Answer:
Yes Stanley is aware of the transportation issues plaguing MAP and he is not sure what to do about it.
Role of transportation played in MAP’s supply chain:-
Stanley received multiple calls from customers complaining about late shipments for both truck and rail delays.
Transportation delays were measured in days, not hours. Railcar delivery windows increased from two to seven days, and overall truckload service levels fell to less than 85 percent on time.
Due to rise in price of the transportation cost for MAP the cost of goods sold rose from 11 to 19 percent.
The transportation problems led to a demand by MAP’s largest domestic customer.
Stanley tells that even a 10 percent increase in inventory levels would reduce return on asset levels from 13.7 percent to 9.1 percent. MAP’s inventory investment is 22 percent of total assets and inventory carrying costs are nearing 27 percent of inventory value, both of which are consistent with manufacturing industry norms.
The outbound logistics is an essential primary activity of the value chain no matter what industry.
Question 2
Agricultural commodities and products from the Midwest are shipped to locations around the globe. If global demand continues to grow, how will different transportation modes (rail, truck and barge) be affected? How will these changes impact MAP’s current supply chain strategies?
Answer:
If the global demand continues to grow then there will be a tough time for the agriculture products which is being shipped from the Midwest to all locations around the globe as if there is a rise in demand then costs related with the different means of transportation will increase and the