🙂

Công thức là đây

Module Quản lý kho cô Hà

Done?

Date

Review day

Box

Task

Stats

Todayreview?

space calculation

số pallets như vừa rồi

tính tọa độ

So sánh phương án theo điểm hòa vốn

các chỉ tiêu chính đo performance

space calculation

pallets

the center of gravity

Break even point

inventory turnover days, lượng hàng tồn kho các chỉ tiêu chính đo performance

K ra EOQ

CHAP 1 & 2

SQUARE ROOT RULES

1. x2=100,000 * (căn(1/3)) → x2=…

2. x2 = 100,000*(căn(6/3)) → x2=…
Thể hiện sự tương quan giữa số lượng WH và số lượng (quantity) của inventory, hiện tại và tương lai

Lưu ý: assume là số lượng inventory các nhà kho như nhau

THE INVENTORY THROUGH-PUT CURVE

Inventory through-put là thông lượng, sản phẩm giao đến khách hàng trong 1 thời gian nhất định

a. When consolidating into 1 WH:

New annual throughput = 10,000 + 17,500 = 27,500

Gióng lên throughput curve → ra 1 điểm, gióng sang trục tung (average inventory) → Inventory = 2,500
b. When consolidating: New Inventory = 2,500

Not consolidating: Old inventory = 1,300 + 1,900 = 3,200

→ When consolidating, 1 WH cannot contain inventory of the old 2 WHs

→ Shouldn’t

THE WEIGHTED-FACTOR RATING MODEL

A = 7*7% + 9*12% + 8*12% *…

So sánh A, B, C ⇒ cái cao nhất là recommended location

B: 8x7% + 7x12% + … + 8x7% =

C: 5X7% + 5X12% + 7X12% +………

THE CENTER OF GRAVITY METHOD

Công thức là đây 1

 The optimal location for a new warehouse would be at the coordinates
Where to locate the new WH?

Cx = ((200 ∗ 2500) + (300 ∗ 1300) + (100 ∗ 5000))/(2500 + 1300 + 5000)

Cy = ((50 ∗ 2500) + (100 ∗ 1300) + (150 ∗ 5000))/(2500 + 1300 + 5000)

Có Cx và Cy thì map lên thôi

LOAD-DISTANCE METHOD
Lượng hàng cần chở đến người ta

Có thể tính theo center of gravity method

⇒ Ra được vài tọa độ tối ưu

→ Xét xem gần location nào nhất (VD trong bài này là B và E) ⇒ chỉ tính B và E thoi

Distance * Load

DAE = căn [(2,5-8)^2 + (4,4-5)^2)] =

‘’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’

D*L = DAE x Load = DAE x 2000 =

Tính tương tự với các location còn lại

⇒ So sánh D*L của B và E, cái nào thấp hơn cái đó tốt 👌

THE BREAK-EVEN MODEL

Công thức là đây 2

 totalannualcost = fixedcost + unitvariablecost ∗ x

Total annual cost A: y= 500.000 + 300x

Total annual cost B: y= 750.000 + 200x

Total annual cost C: y= 900.000 + 100x

Break even points between A & B: Tức là tính nghiệm giữa hàm A và B

500.000 + 300x = 750.000 +200x ⇒ x=2500

Break even points between A & C: Tức là tính nghiệm giữa hàm A và C

500.000 +300x = 900.000 +100x ⇒ x=2000

Break even points between B & C: Tức là tính nghiệm giữa hàm B và C

750.000 +200x = 900.000 + 100x ⇒ x=1500

Tức là chúng ta có 4 khoảng cần xét
(0:1500) & (1500:2000) & (2000:2500) & (2500:~)

Với mỗi khoảng sẽ có 1 đường thấp nhất, đường nào không được nhắc đến trong tất cả là là no cost advantage

⇒ Trong mỗi khoảng, đường nào thấp nhất là đường ít cost nhất
⇒ Trong bài này tìm 3000 units ⇒ chỉ xét khoảng (2500, vô cùng) ⇒ C (do nó thấp nhất)
Thay x = 3000 vô Total annual cost C: y= 900.000 + 100*3000 = … để biết thấp nhất là nhiêu

Total annual cost of Pittsburg: TCp=10,000+5x

Total annual cost of Atlanta: TCa=30,000+4x

Total annual cost of Miami: TCm= 60,000+3x

Total annual cost of Houston: TCh= 70,000+6x

a. vẽ 4 đường trên 1 graph

mỗi đường vẽ bằng cách x = 0, y =0 ⇒ 2 điểm ⇒ vẽ được

b. PA, PM, PH, AM, AH, MH

TCp = TCa → 10,000+5xpa = 30,000+4xpa ⇒ Xpa = 20,000

TCp = TCm → 10,000 + 5x = 60,000 + 3x⇒ Xpm =25,000
TCp = TCh → 10,000+5x = 70,000 + 6x ⇒ Xph= -60,000 → eliminate

TCa = TCm → 30000+4x = 60000+3x ⇒ Xam= 30,000

TCa = TCh → 30,000+4x = 70,000 + 6x ⇒ Xah =-20,000 → eliminate

TCm = TCh → 60,000 + 3x =70,000 + 6x ⇒ Xmh =-3,333 → eliminate

Define từng range, cái nào có cost advantage:

Xét từng khoảng,

(0;20000): đường màu xanh dương thấp nhất → Pittsburg has cost advantage
(20000;25000): đường màu xanh lá thấp nhất → Atlanta has cost advantage

(25000;30000): đường màu xanh lá thấp nhất → Atlanta has cost advantage

(30000;vô cùng): đường màu vàng thấp nhất → Miami has cost advantage

c. Có số unit ⇒ Chọn khoảng phù hợp ⇒ Trong khoảng phù hợp đó thì đường nào thấp nhất thì chọn do đường đó có cost thấp nhất
Muốn biết thấp nhất là bao nhiêu thì thế số unit vào đường đó

Công thức là đây 3

 Space Calculation & Total Pallet Capacity

No of vehicle = No of load = 20

Hours to unload = 45+35 = 75mins = 1,25h

Space = ((20x1.25)/8)x(26x1.2x1) = 97.5m2

Module width = Width of aisle + X.pallet width* + (X-1).(Clearance back-to-back side)

Module length = Width of upright + Y.pallet length* + (Y+1).(clearance side)

Module height = Pallet height + Goods height + Clearance height + Racking beam height

Khi đó: X: số pallet chiều width

Y: số pallet chiều length

*Pallet width và Pallet length thì dựa vào đề bài cho long side hay short side để lấy số

Đề thi nhiều khi width sẽ cho là chiều dài hoặc chiều rộng

Module width = 3 + 2x1 (là chiều rộng short side của pallet size nè) + 0,1 (clearance back to back)

No of width module = 48/ số vừa tính phía trên

Module length = 0,12 + 3 x 0,1 (clearance slides) + 2x1,2 (là long side của pallet size)

No of length = 120/ số vừa tính

Module height = 0,15 + 0,15 (clearance height)

No of height = 10/ số vừa tính

Cuối cùng nhân 5 cái (k nhân cái module height nhe)

Về tính số pallets các em lưu ý:

Modules width: có thể dùng chiều dài hoặc chiều rộng của Pallets tùy thuộc đề bài cho. Số clearance = số pallets - 1

Modules length: dùng chiều dài/rộng pallets thì tương tự như trên (tùy đề bài). Số clearance = số plallets + 1

Module width = Width of aisle + X.pallet width + (X-1).Clearance back to back side
Module width = 3 + 2x1.2 + (2-1)x0.1 = 5.5
Module length = Width of upright + Y.pallet length + (Y+1).clearance side
No of width module = 300/5.5 = 54
Module height = Pallet height + Goods height + Clearance height + Racking beam height
Module length = 0.12+ 4x1+(4+1) x0,1 = 4,62
Khi đó: X: số pallet chiều width
No of length module = 500/4.62 = 108
Y: số pallet chiều length
Module height = 0.15 + 1.2 + 0.14 + 0.15 = 1.64
*Pallet width và Pallet length thì dựa vào đề bài cho long side hay short side để lấy số
No of height module= 18/1.64=10

Công thức là đây 4

 =⇒ Công thức bự
đề nó bảo width là long sides

length - short sides

CHAP 3 & 4

INVENTORY REPLENISHMENT
● How much to order? EOQ
● When to order? ROP
● Continuous replenishment
● Periodic replenishment

How much to order? EOQ

Co: order cost,
D: demand annual,
Ci: annual holding rate,
Pu: price per unit

What is the minimum total annual inventory cost?

Nếu đối với các bài có buying price không đổi khi mua số lượng sỉ, chúng ta không tính tiền mua hàng vào công thức total cost (vì đối với các option khác nhau, ẩn giá mua đều giống nhau nên không cần thêm vào). Ngược lại, đối
với bài này supplier cung cấp một số option giảm giá theo từng số lượng, đây là bài khó hơn, và cần take into account buying price vào total cost.

Total cost của option 1: số lượng mua hàng <1000 unit:

Chúng ta sẽ lấy 1000 làm lượng inventory đặt hàng.

Total cost = buying cost + ordering cost + holding cost = 5%*1000 + 40*(15000/1000) + (25%*5)*500 = 6225$

Total cost của option 2: số lượng mua hàng từ 1001 đến 2000 món.

Chúng ta chọn trung bình là sẽ đặt 1500 món

⇒ Total cost = buying cost + ordering cost + holding cost = 4.5*1500 + 40*10 + (25%*4.5)*750 = 7993.75$
Total cost của option 3: số lượng mua hàng từ 2001 món trở lên

Chúng ta chọn mẫu là 3000 món

⇒ Total cost = 4$*3000 + 40*5 + (25%*4)*1500 = 13700$

Từ đó suy ra được total cost của option đặt hàng nhỏ hơn 1000 đơn vị là nhỏ nhất. Đồng thời ta tính được EOQ của từng option lần lượt là 980, 1032, 1095. Vậy là công ty nên đặt hàng 980 món trong một lần order.

= căn ((2.100.18000.200) / (25%.120.(200-(18000/360) ))

When to order? ROP

Công thức là đây 5

 LT=Lead time

Periodic replenishment

1. EOQ

D tính theo năm nên nhân 12

Average inventory lấy EOQ/2

2. ROP

D theo day, LT theo day = 45 ngày

Tính SS theo

3. M

LT = 45 days

T = EOQ/Annual Demand = kết quả câu 1/monthly demand x 12

NOTE: ví dụ z=0.75, nhìn vào hình vuông để chọn số gần 0.75 nhất. Từ đó chiếu lên 2 trục

Công thức là đây 6

 SKU: mã quản lý các mặt hàng khác nhau

CHAP 5 & 6

COST AND PRODUCTIVITY

1. WH: delivering faster → đầu tư CSHT, vehicle

HR: thuê thêm người, training

2. Lấy sales/distribution cost ⇒ cái nào ra tỷ lệ lớn nhất thì chọn (reasonable)

ASSET UTILIZATION

FLEXIBILITY

nếu cô cho balance sheet: Thì lấy số ở cái năm cần tính luôn, không phải chia trung bình. Inventory cover A = (500/4000) x 365

Inventory cover in days: lượng stock trong kho có thể cover được bao nhiêu ngày nữa Inventory turnover A = 4000/500

Đô la trên 1 tấn = COGS là cost of materials đó/ Sales (tons)

Average inventory = Inventory trong balance sheet bằng tiền / đô la trên tấn
Inventory turnover = Sales (tons) / average inventory

Inventory days = 365 / Inventory turnover

Receivables Turnover = Sales ($) / Account Receivables

RELIABILITY

Công thức là đây 7

 Perfect order: 97%x98.5%x99.5%x98% = 93.2

On time and in full: 97%x98.5%

Question 1:
Discuss and illustrate the economic justification for establishing a new warehouse

Nhờ Notion AI đi sao t xài ko đc hiu hiu

To justify the establishment of a new warehouse, several economic factors should be considered.

Factors include the distance to customers, transportation costs, inventory costs, and labor costs.

If customers are spread out over a large geographic area, a new warehouse closer to them may reduce transportation costs.

If customers are concentrated in one area, maintaining a single warehouse may be more cost-effective.

If demand requires a large amount of inventory, establishing a new warehouse may reduce inventory carrying costs and improve cash flow.

Labor costs should also be considered, and establishing a new warehouse in a location with lower labor costs may be cost-effective.

The economic justification for a new warehouse depends on the company's specific circumstances and customers.

A thorough analysis of the costs and benefits should be conducted to determine the economic viability of a new warehouse.

The economic justification for establishing a new warehouse is based on reducing overall logistics costs. When total cost reductions are achievable, the warehouse is economically justified ¹⁴. The basic economic principle justifying
establishment of a warehouse is transport consolidation. Manufacturers sell products over a broad geographical market area. If customer orders tend to be small, then potential cost saving of consolidated transportation may provide economic
justification for establishing a warehouse³.

Question 2:
a) Discuss order picking impact on WH

Picking nhanh → giảm lead time giao hàng, có thể dành nhiều thời gian cho các hoạt động khác trong warehouse. Picking chuẩn → tăng tỷ lệ giao hàng đúng cam kết ⇒ overall: tăng service level
Picking về mặt nature thì khá là labor-intensive → cost cao (trong slide 27 có cái hình cost của picking là cao nhất trong các WH activities) → picking tốt, hiệu quả thì giảm cost, dùng thể dùng tiền đó đầu tư thêm công nghệ, training nvien
blah blah chém vô

Order picking is a crucial part of warehouse management. It constitutes all of the steps involved in physically retrieving the items stored in the warehouse to fulfill a customer order. Smart businesses look to improve order picking for a good
reason — it’s the most labor-intensive and expensive activity in the warehouse, typically accounting for more than half of warehouse operating costs ¹². Improvements in order picking help businesses get the right products to customers faster,
and spend less money on the associated steps ¹.
The most time-consuming part of the order picking process is traveling, which takes up 55% of the warehouse selector’s time, on average, followed by paperwork and other activities (20%), searching (15%) and extracting (10%), according to
research from Georgia Tech Supply Chain and Logistics Institute ². For this reason, much of the work around improving order picking processes is aimed at reducing unproductive travel time.

Discuss how order picking can impact the performance of the warehouse?

Order picking is a critical activity in the warehouse that can have a significant impact on its performance. Here are some ways in which order picking can affect the overall performance of a warehouse:

1. Time and Cost Efficiency: Order picking efficiency can have a direct impact on the time and cost efficiency of a warehouse. By optimizing the order picking process, warehouses can reduce the time it takes to fulfill orders and improve
the accuracy of order fulfillment. This can lead to faster turnaround times, reduced labor costs, and increased throughput.

2. Inventory Accuracy: Order picking is also closely related to inventory accuracy. Accurate order picking can help ensure that the right products are delivered to the right customers, reducing the number of returns and exchanges. This can
result in improved customer satisfaction and reduced costs associated with returns handling.

3. Capacity Utilization: Order picking can also affect the utilization of warehouse capacity. Efficient order picking can help warehouses maximize their storage capacity by reducing the amount of time products spend in the warehouse. This
can result in increased storage capacity and reduced inventory carrying costs.

4. Worker Productivity: The productivity of warehouse workers can also be affected by order picking processes. By optimizing the picking process and reducing the amount of time spent walking or searching for products, workers can
become more productive and efficient.

5. Safety and Ergonomics: Order picking can also have an impact on the safety and ergonomics of the warehouse. An efficient order-picking process can help reduce the risk of accidents and injuries by minimizing the amount of time
workers spend on ladders or reaching for products.

Công thức là đây 8

 Overall, the order picking process is a critical component of warehouse performance. By optimizing this process, warehouses can improve efficiency, accuracy, capacity utilization, worker productivity, and safety, resulting in improved
performance and profitability.

b) Explain how cluster picking & zone picking for 4 orders

Cluster picking: the picker will pick 4 orders at once using 4 boxes to contain items of each order
→ Trong bài này, Picker mang theo 4 cái thùng, đi lần lượt từ Zone A → Zone B → Zone C, tại mỗi Zone thì cứ lần lượt theo loại sản phẩm (VD: A, B, C, D, E,…), loại nào có trong order nào thì bỏ vô thùng của order đó. Gom tới loại sp cuối
cùng của Zone cuối cùng là hoàn thành
Zone Picking: Pickers are allocated to zones to pick items within the zone and put to boxes - picked items will be re-sorted to orders or orders travel to different zone to be completed.

→ Zone A, B, C mỗi zone sẽ có 1 picker riêng biệt. Tại mỗi Zone, picker cũng có 4 cái thùng để chứa item đúng theo từng order. Xong Zone mình thì pass tới Zone tiếp theo (A→B→C) (hình dung giống như cái dây chuyền sản xuất á)
Lưu ý: Zone Picking là lần lượt qua từng Zone, còn Wave Picking (=Batch + Zone) là ở các Zone picker pick hàng cùng lúc luôn rồi assemble lại ở 1 chỗ để consolidate - shipping
Batch picking: y chang Cluster, nhma chia orders ra thành nhiều batch (dựa trên critierias như: độ quan trọng, độ gấp, giá trị đơn hàng,…)

c) Nhờ thêm Notion AI nha, nhma theo t research thì:

Zone picking is best suited for warehouses that fulfill complicated orders with many units or at least a combination of complicated and simple orders, scale lớn nhiều tiền nhiều nhân lực

Cluster picking is used with small order picking or quantities that are less than case quantities, scale lớn nhân lực ít

Cluster picking and zone picking are both methods for organizing the order picking process in a warehouse. The effectiveness of each method depends on the specific characteristics of the warehouse and the products being stored.
Cluster picking is more effective than zone picking when:

Orders contain products from multiple zones or areas within the warehouse.

The size and weight of the items being picked are relatively small and light, making it easy for the picker to transport a large quantity of items at once.

The picking process is highly repetitive and predictable, allowing the picker to quickly and efficiently gather items from multiple locations.

Zone picking is more effective than cluster picking when:

The warehouse is large and contains multiple distinct zones or areas.

The orders being fulfilled are large and contain many items, requiring pickers to spend a significant amount of time in each zone to collect all of the necessary items.

The items being picked are large or heavy, making it difficult for a picker to transport multiple items at once.

The warehouse uses advanced technology such as pick-to-light or voice picking, which can help guide the picker through each zone and reduce the risk of errors.

In general, the choice between cluster picking and zone picking will depend on the specific needs and characteristics of the warehouse, including the size of the facility, the number and types of products being stored, and the order fulfillment
requirements. A well-designed warehouse management system can help determine the most effective picking method based on these factors.

Question 3:

a) Câu này dễ rùi, áp công thức thui. Nhắc lại: = (tọa độ x1*volume 1) + (tọa độ x2*volume 2)+…/tổng volume, tương tự với Y.
Vẽ hình: như vẽ Oxy bth thui

b) Inventory turnover = Total number of units sold/average inventory

→ Average inventory = Total number of units sold (throughput)/inventory turnover
Average inv DC1 = 1200

Average inv DC2 = 1000

Average inv DC3 = 1500

Từ average inventory và throughput ⇒ locate đc vị trí 3 WH trên curve → phác họa đc throughput curve
When consolidating into 1 WH:

New throughput = 6000 + 3000 + 9000 = 18000

Gióng lên throughput curve rồi chiếu qua cột Average Inv → tính ra đc Average Inv khi consolidate

Average inv (ko consolidate) = 1200 + 1000 + 1500 = 3700

Lấy mới trừ cũ (số inv gióng qua với 3700) → ra đc số inventory save được, nhân $5 → ra số tiền save được

c) Notion AI ik
Xem ad và disad của centralize và decentralize

Discuss the possible changes in other costs such as facility /transportation/ resources and service level when reducing number of DCs to one

When reducing the number of distribution centers to one, there are several possible changes in costs and service level that may occur.
Facility Costs:

Consolidating distribution centers may result in a decrease in facility costs, as fewer facilities will need to be maintained. However, establishing a new, larger facility to handle the increased volume may result in higher costs.

Equipment costs may also be impacted. Fewer distribution centers may require a larger initial investment in equipment to handle the increased volume.

Operating costs such as utilities, maintenance, and rent may decrease with the consolidation of distribution centers.

Transportation Costs:

Consolidating distribution centers may lead to increased transportation costs if the single distribution center is located farther away from customers. However, if the consolidation allows for more centralized inventory management and
transportation routing, transportation costs may decrease.

Shipping volumes may increase with a single distribution center, potentially leading to more favorable shipping rates.

Service Level:

Reducing the number of distribution centers may impact service level by increasing lead times and reducing inventory availability.

However, consolidating distribution centers may also allow for a more streamlined and efficient distribution system, leading to improved service levels and faster order fulfillment.

Overall, the impact of reducing the number of distribution centers to one will depend on the specific circumstances of the company, including the location of customers, the volume of orders, and the costs of maintaining multiple distribution
centers. A thorough analysis of the costs and benefits should be conducted to determine the optimal number of distribution centers for the company.

New table

Criteria Centralized Warehousing Decentralized Warehousing

Safety Stock and Avg. Lower safety stock and higher average Higher safety stock and lower average
Inv. inventory levels inventory levels
Lower responsiveness to changes in demand Higher responsiveness to changes in
Responsiveness
or market demand or market

Customer Service May be harder to meet specific customer Easier to meet specific customer service
Demands service demands demands
Transportation Cost Lower inbound transportation cost higher Higher inbound transportation costlower
(Inbound/Outbound) outbound transportation cost outbound transportation cost
Warehouse System Higher capital cost and higher operating
Lower capital cost and lower operating cost due
Capital and Operating cost due to the distribution of resources
to the centralization of resources
Costs across multiple locations

some advantages and disadvantages of a centralized warehouse system displayed in a table:

Công thức là đây 9

 1. What differences in the retail environment may justify the fact that the fast-moving consumer goods supply chain in India has far more distributors than it has in the US?

2. A specialty chemical company is considering expanding its operations into Brazil, where five companies dominate the consumption of specialty chemicals. What sort of distribution network should this company use?
3. A distributor has heard that one of the major manufacturers from which it buys is considering going direct to the consumer. What can the distributor do about this? What advantages can it offer the manufacturer that the manufacturer is
unlikely to be able to reproduce?
4. What types of distribution networks are typically best suited for commodity items?
5. What type of network is best suited to highly differentiated products?

6. In the future, do you see the value added by distributors decreasing, increasing, or staying about the same?
7. Is the online channel likely to be more beneficial in the early part or the mature part of a product’s life cycle? Why?

8. Why has the online channel been more successful in the com-puter hardware industry compared with the grocery industry? In the future, how valuable is the online channel likely to be in the computer hardware industry?
9. Consider the sale of home improvement products at Home Depot or a chain of hardware stores such as True Value. Which can extract the greater benefit from adding the online channel? Why?

10. Amazon sells books, music, electronics, software, toys, and home improvement products online. In which product category does going online offer the greatest advantage com- pared with a retail store chain? In which product category
does the online channel offer the smallest advantage (or a potential cost disadvantage) compared with a retail store chain? Why?
11. Why should an online seller such as Amazon build more warehouses as its sales volume grows?

12. Amazon has opened bookstores and announced the opening of convenience stores. How can these traditional retail channels allow Amazon to complement ts online channel effectively?

1. The retail environment in India may justify the fact that the fast-moving consumer goods supply chain has more distributors than in the US due to factors such as a large population and a fragmented retail sector. In India, there are many
small, independent retailers who require a more localized supply chain, leading to the need for more distributors. In contrast, the retail sector in the US is more consolidated, with larger retail chains and fewer small, independent retailers,
resulting in a less localized supply chain and fewer distributors.

2. The specialty chemical company should consider using a direct distribution network in Brazil, where five companies dominate the consumption of specialty chemicals. This would involve establishing a distribution center in Brazil and
shipping products directly to customers. This approach would allow the company to have more control over the distribution process and potentially reduce costs by eliminating intermediaries.

3. If a major manufacturer is considering going direct to the consumer, a distributor can offer the manufacturer several advantages that are difficult to reproduce, such as established relationships with retailers, expertise in the distribution
process, and access to a large customer base. The distributor can also help the manufacturer maintain a strong presence in the retail market by providing marketing and promotional support, which is essential for building brand
awareness and driving sales.

4. For commodity items, a distribution network that emphasizes efficiency and low cost is typically best suited. This can involve centralized warehousing and a transportation network that is optimized for speed and cost-effectiveness.
Distributors may also focus on high-volume sales and low margins to achieve economies of scale.

5. For highly differentiated products, a distribution network that emphasizes responsiveness and customer service is typically best suited. This can involve a decentralized warehousing and transportation network that is optimized for
flexibility and quick response times. Distributors may also focus on providing value-added services, such as customization, to differentiate themselves from competitors.

6. The value added by distributors is likely to increase in the future, as the complexity of the supply chain continues to grow and customers demand more specialized services. Distributors have the expertise and infrastructure to manage
complex supply chains and provide value-added services that manufacturers and retailers may not be able to provide on their own.

7. The online channel is likely to be more beneficial in the early part of a product's life cycle, when customers are still learning about the product and demand is growing rapidly. In the mature part of a product's life cycle, demand may be
more stable and customers may have established preferences and loyalties, making it more difficult to attract new customers and grow sales through the online channel.

8. The online channel has been more successful in the computer hardware industry compared with the grocery industry due to several factors, such as the nature of the products (which are more easily shipped and require less specialized
handling), the higher price points of computer hardware products (which makes online sales more attractive), and the greater availability of information and reviews online (which helps customers make informed purchasing decisions). In
the future, the online channel is likely to continue to be valuable in the computer hardware industry, as more customers become comfortable with online shopping and demand for these products continues to grow.

9. Home Depot can likely extract the greater benefit from adding the online channel, due to its large scale and well-established brand. Home Depot can use the online channel to expand its customer base and reach more customers in
remote or underserved areas. True Value, on the other hand, may have a more limited customer base and may struggle to attract new customers through the online channel.

10. Going online offers the greatest advantage for electronics and software products, due to their high price points, ease of shipping, and the availability of information and reviews online. The online channel offers the smallest advantage (or a
potential cost disadvantage) for grocery products, due to the perishable nature of the products and the need for specialized handling and transportation.

11. Amazon should build more warehouses as its sales volume grows to reduce delivery times and improve customer satisfaction. By having more warehouses in more locations, Amazon can store products closer to customers, reducing
shipping times and potentially reducing shipping costs.

12. By opening bookstores and convenience stores, Amazon can complement its online channel effectively by providing customers with additional options for purchasing products and accessing Amazon's services. These physical stores can
also help Amazon build brand awareness and provide a more personalized experience for customers. Additionally, the stores can serve as pickup and drop-off locations for online orders, making the online shopping experience more
convenient for customers.

This document provides a comprehensive analysis of Halloran, a metal service center located in New England. The document offers insights into the company's purchasing strategy, sales approach, and growth prospects. Halloran is known
for its commitment to providing exceptional service to its broad customer base. The company offers over ten thousand line items across twelve different product categories, which is twice the industry average for service centers in New
England. This approach has enabled Halloran to establish a strong market position and compete effectively with both national and local firms.
Halloran's sales approach is centered around building personal relationships with customers and understanding their needs and preferences. The company places a significant emphasis on small orders, which it believes gives them a
competitive edge over its competitors. Halloran's major competitor is Allied Steel and Aluminum, another independent regional service center located in Lowell, Massachusetts.

The document also highlights the challenges of managing an inventory-intensive business like Halloran. The multi-facility approach to the business makes it more inventory intensive than its competition, and it is challenging to make significant
cost-cutting measures without alienating loyal customers. The document recommends a new course of action that makes sense for Halloran's longer-term competitive position.
Moreover, the document provides insights into Halloran's growth prospects. The company's growth strategy is centered around deeper penetration of existing areas by adding new customers and increasing share of business with existing
customers, adding new products and widening the product line, increasing the level of processing offered, and geographic expansion by introducing new branches. Halloran has historically grown through acquisitions of local competitors, and
the right branch manager is key to the success of the expansion strategy. The company's primary limit to growth is the ability to secure capital, given that it is highly leveraged and in an inventory-intensive business.

Overall, this document is an excellent resource for anyone interested in the metal service center industry. It provides a comprehensive analysis of Halloran's business model, competitive landscape, and growth prospects. The document also
highlights the challenges of managing an inventory-intensive business and the need for a new course of action to maintain Halloran's competitive position.

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