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Facquier Gas Company - Case Study Example

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In response to the increasing demand for energy, Facquire Gas Company has to implement changes that will accommodate the supply…
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Facquier Gas Company
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Extract of sample "Facquier Gas Company"

Facquier Gas Company Affiliation: Key Facts The clearance of land in order for humans to develop more land for settlement and industrialization has led to the increase in demand for energy. In response to the increasing demand for energy, Facquire Gas Company has to implement changes that will accommodate the supply sufficient to supply the market. On the other hand, in order for the supplies to be delivered, new specifications have to be designed and approved so that they can be ordered. Currently, the design engineer suggest that the pipe specifications should consider length of 57 feet, 3 and half mile extension, and 24 feet in diameter. These specifications are designed to accommodate the gas flow which should start flowing in September. Thus, in this case there are two variables for consideration and require the company to act fast so that it completes the installation of the pipes before September. Additionally, due to the increase in demand, the thickness of the pipe, which determines the volume of gas passing per unit time, has to be increased as well.
There are two problems with reference to the case of Facquier Gas Company. Firstly, in order to reflect the desired changes that will lead the company to acquiring more sales and supply to more customers, the company, through Mr. Murphy is burdened with the task of accommodating major lead times. This means that the supply of the required products will foreseeably experience some delays related to the fact that Facquier Gas Company’s orders would not be fitted in the schedules of suppliers. Additionally, from Mr. Murphy’s understanding, the company has formerly used different specifications for the pipes such as 3/8 inch while the current design uses 3/7 inch thickness. The length of the pipe in former specifications has been 35-45 feet in length. Eventually, the consideration of order the products within a short schedule is also faced with a constraint of lead time. This is the case with the wrapper and coal tar as one company supplying the coal tar s located at Philadelphia while he one to supply the wrappers is located in Atlanta.
In order to deal with the eminent problems facing the company at the current moment, three alternatives are at the company’s disposal. These alternatives are enlisted below;
a. To adapt the new design specifications as they are in order to meet the current demand and at the same time offset the time wastage the 3/8-inch pipes contribute for attracting regular standards’ inspections (Cowen, 2014).
b. The company should consider acquiring the products with the new specifications but consider choosing a different logistics channel offering quicker delivery packages. Although the quicker delivery will increase costs, it will ensure that the company is ready by September. On the other hand, the quicker means will incur higher charges that should be transferred to the customer over the long-run in order to manage competition (Cowen, 2014).
c. Lastly, the company can stick with the former specifications and consider different suppliers outside the country such as international suppliers where products trade for lower prices. Additionally, the international logistics companies offer same-day delivery (Cowen, 2014).
Facquier Gas Company should consider the application of option 1 which requires the company to embrace the new chances as well as to change suppliers so that it can establish new ties with other logistics channels and companies capable of meeting short deadlines. The rationale of selecting this option is based on the issue of dealing with and offsetting lead times and assessment of companies with better offers for the new specifications which will allow considerably fair transition of the costs to the customers once the expansion is done.
Implementation Plan
In order to implement option one, the company will need to invite bidders for the supply of all its required products. After bidders place their bids for a contract to supply the products, the company will select the best qualified bidder considering lead time of supplier, cost of products from producer, and efficiency of both the manufacturer and the logistics company in processing orders as they are made.
Cowen, D. (2014). The Deadly Life of Logistics: The Labor of Logistics; Just-in-Time Jobs. University of Minnesota Press. Read More
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