WGP chemical company Essay

What is the total distribution cost of W - G - P Chemical Company? What is the cost per pound, 1 cubic foot, case, line and order? How can these measures help to distribute the review process? To calculate the total distribution cost, you need to calculate the shipping cost. The inventory cost ratio is 18%. Calculation formula is annual holding cost = average stock level * holding cost rate The average stock in Table 4 is $ 90 million. Therefore, annual freight charge = $ 90 million * 0. 18 = 16 dollars. Therefore, the total allocation cost equals all the costs in Table 4, except for the average stock level.

Cost per order = total shipping cost / order = 33. 2M / 19139 = 1,7346 dollars. W - G - P Chemical decides where to cut costs for each of these orders 678. In addition, by comparing these measurements with the competitor's measurements, we identify areas for improvement and areas with competitive advantage. 2) Draw distribution and distribution network of WGP Chemical Company on the map. What products and market characteristics will help you explain this distribution structure? Most of these agricultural areas are close to the logistics center and transportation facilities are convenient.

Transportation method such as cargo railway, canal, inland waterway, interstate freeway. Farmers purchase prevention and support products 1 to 2 weeks before field application. This also depends greatly on rainfall intensity. Because the distribution center is near the agricultural area, WGP will be able to provide service to these farmers quickly. By adopting this strategy, lead time can be shortened. Dry pesticides and liquid pesticides are usually stored in bulk containers.

Therefore, the best means of transportation is water, rail, and highway. 3) Which alternative allocation method should be considered for W-G-P for prevention and support? 4) Discussion a) Reasons for early order planning b) Collection and delivery policy c) Utilization of public warehouse facilities and personal warehouse facilities. a) Pre-order program - WGP is equipped to meet the needs of all dealers. The program will also allow WGP to plan shipping at their convenience. This will allow WGP to consolidate cargo as much as possible and avoid lower than the trucks, which will help to significantly reduce transportation costs.

b) Customer pickup policy - This policy helps to reduce shipping costs as WGP is not responsible for shipping products and delivering to distributors. c) Use of public warehouses and private warehouse facilities - Since prevention and support are seasonal products, it is best to use public warehouses instead of private warehouses at WGP. Through the public warehouse, WGP avoids paying fixed costs to the warehouse and avoids paying labor in private warehouses.

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