Evaluate the current China/Taiwan logistics costs. Assume a current total volume of 190,000 CBM and that 89 percent is shipped direct from the supplier plants in containers. Use the data from the case and assume that the supplier-loaded containers are 85 percent full. Assume that consolidation centers are run at each of the four port locations. The consolidation centers use only 40-foot containers and fill them to 96 percent capacity. Assume that it costs $480 to ship a 20-foot container and $600 to ship a 40-foot container. What is the total cost to get the containers to the United States? Do not include U.S. port costs in this part of the analysis.
1. Evaluate the current China/Taiwan logistics costs. Assume a current total volume of 190,000
CBM and that 89 percent is shipped direct from the supplier plants in containers. Use the data
from the case and assume that the supplier-loaded containers are 85 percent full. Assume that
consolidation centers are run at each of the four port locations. The consolidation centers use
only 40-foot containers and fill them to 96 percent capacity. Assume that it costs $480 to ship a
20-foot container and $600 to ship a 40-foot container. What is the total cost to get the
containers to the United States? Do not include U.S. port costs in this part of the analysis.
2. Evaluate an alternative that involves consolidating all 20-foot container volumes and using only
a single consolidation center in Shanghai/Ningbo. Assume that all the existing 20-foot container
UU- SCM-1200 Introduction to
volumes and the existing consolidation center volumes are sent to this single consolidation
center by suppliers. This new consolidation center volume would be packed into 40-foot
containers, filled to 96 percent, and shipped to the United States. The existing 40-foot volume
would still be shipped direct from the suppliers at 85 percent capacity utilization.
3. What should be done based on your analytics analysis? What have you not considered that may
make your analysis invalid or that may strategically limit success? What do you think Grainger
management should do?
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where did the direct ship volume (CBM) of 169,100 cost come from?
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