This report will detail analysis and will include foundational calculations and suggestions for optimizing an existing company’s logistics framework. It should be a complete, polished artifact containing all of the critical elements of the final product.
This is Module 7

ANSWER

 Acme Bicycle Case Study

Scenario Background

The senior management feels that there is a need for the firm to expand in the market. This means that some factors have to be figured to ensure that the firm can maximize on its ales. The key elements essential for determining the logistics support needs of the firm include its inventory, packaging of its products, storage, watershed, and materials need for handling the company products. The company needs to improve on its delivery duration and, which are some of its most important needs.

Sourcing Alternatives:

Costs for inhouse production per bicycle would cost roughly $21, while the cost of outsourcing is roughly $24 per bike.  This is an indication that the  most suitable method would be to have an in-house production as way of minimizing on costs and focusing on making more revenues.

3. 3. Post-Sale Support/
4. Assess company capacity and approaches to satisfy needs.
5. Capacity Constraints: 

Constrained capacity happens when a business has the insufficient production capacity to meet demand. For this organization, some of the capacity constraints include equipment capacity, production in line capacity, poor reliability logistics, and transport capacity.

2. Product Positioning

For easy delivery and convenience, there will be a need for the organization to position itself directly against the competition. This will ensure that it confirms its superiority in the industry and ensure that it makes more sales and as a result have more growth in the future. The organization will need to focus on the benefits, as a way of ensuring that the products do better than the available alternatives (Camilleri, 2018). There will be a need for more capital as a way of ensuring that positioning is achieved. The firm will also need to improve on its equipment capacity and also enhance its logistics and transport capacity.

3. Materials Requirements Planning

Some of the materials requirements include storage and handling equipment, such as machinery and shelves. The company also needs transportation materials such as lorries and trucks which will help in facilitating the transport of the bicycles for supply. Other materials which will be important for planning include engineered systems such as conveyor systems and robotic delivery systems which will help in faster and more effective delivery.

1. Recognize and apply logistics management techniques given internal capabilities.

Production Plan Creation:

The optimal batch size for the organization would be 500 bikes per day given the demand and the production capacity by the company.

Production and Stockage Alternatives:

The most suitable method for the organization is having a make-to-order strategy. In the strategy, the organization will get to manufacture the end products once the customer places the order (Kuthambalayan & Bera, 2020). This will mean that additional time will be required before a client receive the end product. It will also enable flexibility for the firm.

Profit Potential

The optimal mix of two products that the company can produce includes bicycle spare parts and safety kits that the buyers of the bikes can use. This will help in overcoming major constraints that are currently affecting the business.

1. Manage sourcing and inventory to minimize costs.
2.    InventoryLevels:

The most suitable inventory levels for bicycles would be around 600 for Scorpion bikes per month based on the number of sales made. For Princess Leah, 500 bikes and 350 for Robo bikes, which will ensure that the production schedule and sales are respected. This will ensure that no money is wasted on extra storage.

Inventory Management Evaluation:

Having effective inventory management will help in keeping track of all the stocked goods. It will also ensure that  the right products are in place at the right time and right cost,

An effective inventory management system will also help cause a quick reaction to market demands and will ensure that the stock is not too much or too little (Panday & Navanti, 2021). It will make the entire organization efficient and as a result, lead to increased revenue..

2.    Planningfor Inventories:

This entails calculating the inverse of an in-stock rate. This is by calculating non in stock and divided by available Stock Keeping Units.

20/60= 0.3
3.     Just-in-Time (JIT) Inventory

Demand per day * product item supply lead time divided by number of items in box

60 * 300/ 52

346.15

Manage a physical distribution system to minimize costs.

Physical Distribution Process:

To have an effective physical distribution process, there first will be the need to establish the physical distribution function objectives. This is to be followed by examining the cost trade-offs, as way of determining how and to what extent each component will be utilized (Morgan, Tokman, Richey, & Defee, 2018). This is followed by identifying and selecting designing alternatives. This will help in dictating the range of cust0ometr satisfaction levels which are acceptable to the firm.

Warehousing Effectiveness 

To determine the effectiveness of the warehouse operations. There is a need for undertaking a thorough analysis of some of the key metrics. One of the metrics is the receiving of raw goods, where when effective a warehouse reception of raw goods is smooth and efficient, which is reflected by the speed and also results.

Shipping Management to Minimize Costs

First, there is a need to decrease the shipping distance. This is since, the further the shipping destination is, then the more expensive it becomes. There is also the need to weigh the packages and ensure that their dimensions are reduced as a way of accommodating as many products as possible. Another way of shipping management as a way of reducing costs is inuring with third parties since they are relatively cheaper.

Warehousing Utilization 

It is manifest that more needs to be done to ensure that there is better warehouse utilization. This is to ensure that the entire warehouse is efficiently and effectively used. Failure to effectively utilize the warehouse means that the organization will incur more costs, and ultimately fail to attain its set goals and objectives.

References

Camilleri, M. A. (2018). Market segmentation, targeting and positioning. In Travel marketing, tourism economics and the airline product (pp. 69-83). Springer, Cham.

Kuthambalayan, T. S., & Bera, S. (2020). Managing product variety with mixed make-to-stock/make-to-order production strategy and guaranteed delivery time under stochastic demand. Computers & Industrial Engineering, 147, 106603.

Morgan, T. R., Tokman, M., Richey, R. G., & Defee, C. (2018). Resource commitment and sustainability: a reverse logistics performance process model. International Journal of Physical Distribution & Logistics Management.

Panday, R., & Navanti, D. (2021). Inventory Management Evaluation and Inventory Forecast Using EOQ. Syntax Literate; Jurnal Ilmiah Indonesia, 6(1), 395-406.