L5 Transportation in Distribution Network

Question 1

Conditions appropriate for cross-docking

Answer 1

1. Each buyer purchases multiple items from different suppliers
2. Predictable ordering/delivery schedules
3. Substantial shipment sizes to each buyer
4. A powerful entity who owns/controls network

Question 2

Conditions that “DC with storage” is preferred over “Direct shipment”

Answer 2

• if transportation cost is high (e.g. small shipments, long transport distance)
• Low unit inventory holding cost (product of lower value or lower obsolescence rate)
• Lower facility cost (labor,taxes..)
• Shorter response time is needed

Question 3

Conditions when cross-docking is preferred over DC with storage

Answer 3

High inventory holding cost relative to the cost of coordinating shipments

Question 4

Milk runs

Answer 4

Use of a single trip allows consolidation, for frequent small deliveries for a set of buyers in geographic proximity

Question 5

Tradeoff of milk run consolidation

Answer 5

1. Temporal consolidation = Wait till sufficient cargoes to arrive to fill up truck
2. Spatial consolidation= fill up truck by covering large geographical area, so more delivery points, so takes long time to make all deliveries.

Tradeoff is service!

Question 6

Transhipment

Answer 6

Shipment of items between 2 or more facilities in supply chain to meet immediate needs

Question 7

Cross-filling

Answer 7

Serve demand from more than one stocking point

In stock out situations, demand can be filled from other sites.