, KKC - Case Study Example

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The company has 02 factory units at Los Angeles and San Francisco, and has sales in more than eight different locations of the country. KKC has kept…
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Case Study, KKC
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KKC is computer hardware manufacturing company, and has been able to attract s from different regions of United s. The company has 02 factory units at Los Angeles and San Francisco, and has sales in more than eight different locations of the country. KKC has kept its business practices extremely simple, and has refrained from the concept of sales outlets, and is reluctant to keep its inventory at other locations.
KKC has realised that it has been investing enough towards the transportation of its units from one place to another, and is therefore seriously considering optimization of its transportation practices and routes to achieve possible savings. KKC management has decided not to overburden its customers with the transportation tariff, and therefore it incurs all the payment towards insurance of the goods and its safety; the customer is liable to only pay for the transportation charges upon receipt of the product.
As per the customer survey, less than 5percent of the customers have asked for delivery within period of 4days. In this case, we will try to satisfy 95percent of the customers by developing transportation strategy through which delivery can be made within 4days. On daily basis Houston, Minneapolis and Little Rock are the locations where less than 20units are procured on daily basis. In other locations, the average demand is more than 40units; therefore we would give Houston, Minneapolis and Little Rock relatively lower priority.
We are ignoring Little Rock and Minneapolis for daily shipment; therefore KKC will not post its cargo through to these locations directly through airline. KKC is advised to post its units from Houston to Denver, Little Rock and Minneapolis through trucks.
Expenses of air-shipment from LA to Houston = $38 for up-to 2,400lbs – for each 100lbs unit
Expenses of air-shipment from LA to Atlanta = $40 for up-to 2,400lbs – for each 100lbs unit
From Houston to Little Rock and Minneapolis, it will take trucks less than five days to ship the units.
It will cost $10 and $16 for transportation of 100lbs unit from Houston through trucks to Little Rock and Minneapolis.
From the given figures, it is evident that transportation from Houston and Atlanta shall be feasible option for the company. Houston and Atlanta shall be the focal points from San Francisco and Los Angeles. From these two primary locations, further shipment shall be carried through trucks.
The trucks on an average take less than five days from these focal points, and therefore the satisfaction of the customer can be achieved.
The company is advised to adhere to safe policy related to the inventory count, and storage of units at private depots shall never be considered a safe option. The count of units is not high enough to advise company for expansion of its business unit at this stage, however company is advised to focus on marketing side to capture shares. Read More
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