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A company finds that one of its warehouses is out of capacity to store products. Expanding the physical size of the warehouse is not an option. The most appropriate solution would be to increase the:
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Question 303 - CSCP discussion

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A company has a single manufacturing facility. It distributes the products through retail stores located in various regions. Which of the following distribution strategies will minimize the company's warehousing costs?

A.
Utilizing third-party logistics (3PL) providers
Answers
A.
Utilizing third-party logistics (3PL) providers
B.
Pooling inventory in regional warehouses shipping to multiple retail
Answers
B.
Pooling inventory in regional warehouses shipping to multiple retail
C.
Shipping directly from the manufacturing facility to retail locations
Answers
C.
Shipping directly from the manufacturing facility to retail locations
D.
Cross-docking at regional warehouses shipping to multiple retail stores
Answers
D.
Cross-docking at regional warehouses shipping to multiple retail stores
Suggested answer: C

Explanation:

Shipping directly from the manufacturing facility to retail locations is known as direct shipping or direct-to-store delivery. This strategy minimizes warehousing costs by eliminating the need for intermediate storage facilities. By shipping products directly to retail locations, the company reduces the handling and storage costs associated with warehousing. While utilizing 3PL providers, pooling inventory, and cross-docking can also be effective, they involve additional warehousing and handling steps, which can increase overall costs.

Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2008). Designing and Managing the Supply Chain: Concepts, Strategies, and Case Studies.

https://www.logisticsmgmt.com

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asked 16/09/2024
Karabo Mabeba
29 questions
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