TRL3708
ASSIGNMENT 6
SEMESTER 1
2023
, 1.1 Explain four situations under which a flexible logistics operating system may be justified at
WE PROVIDE W & D SERVICE’s Distribution network. (2 marks for theory, 3 marks for
application
1.Delivery Time and Cost Optimization:
One situation that justifies a flexible logistics operating system at WE PROVIDE W & D
SERVICE's Distribution network is when the delivery times and costs from multiple
warehouses are equal. In such cases, the organization can utilize a flexible logistics approach
to choose the facility with the best inventory position or available transportation capacity to
achieve timely delivery. This ensures optimal utilization of the system capacity while meeting
customer service commitments.
For example, in the case study, if two warehouses have equal delivery times and costs, the
flexible logistics operating system can select the warehouse that has the best inventory
position or transportation capacity. This allows WE PROVIDE W & D SERVICE to fulfil
customer orders efficiently and on time, while effectively balancing the workload between
facilities.
2.Channel Optimization based on Order Size:
Another situation where a flexible logistics operating system is justified is when the size of a
customer's order creates an opportunity to improve logistical efficiency through alternative
channel arrangements. This means selecting the most appropriate channel based on the
order size to achieve cost-effectiveness and efficiency in the distribution process.
In the case study, it is mentioned that for small consignments, an independent distributor
could be used, while for large orders, direct delivery would likely be more economical. This
exemplifies how a flexible logistics approach can be applied based on order size. By utilizing
independent distributors for small orders and opting for direct delivery for large orders, WE
PROVIDE W & D SERVICE can optimize its distribution channels to ensure efficient order
fulfilment.
3.Selective Inventory Stocking Strategy:
A flexible logistics operating system is also justified when implementing a selective inventory
stocking strategy. This strategy involves careful analysis of the cost and risk associated with
stocking inventory to determine which items should be placed in specific warehouses.
In the case study, it is suggested that selective inventory stocking can be implemented by
stocking selected items in specific warehouses while keeping the total product line stocked
only at a central facility. For example, high-demand products can be stocked in warehouses
located near the production facilities in South Africa, ensuring quick access and reducing lead
time. Meanwhile, slower-moving items can be centralized in a larger facility, reducing the
overall inventory holding costs.
4.Special Agreements and Arrangements:
ASSIGNMENT 6
SEMESTER 1
2023
, 1.1 Explain four situations under which a flexible logistics operating system may be justified at
WE PROVIDE W & D SERVICE’s Distribution network. (2 marks for theory, 3 marks for
application
1.Delivery Time and Cost Optimization:
One situation that justifies a flexible logistics operating system at WE PROVIDE W & D
SERVICE's Distribution network is when the delivery times and costs from multiple
warehouses are equal. In such cases, the organization can utilize a flexible logistics approach
to choose the facility with the best inventory position or available transportation capacity to
achieve timely delivery. This ensures optimal utilization of the system capacity while meeting
customer service commitments.
For example, in the case study, if two warehouses have equal delivery times and costs, the
flexible logistics operating system can select the warehouse that has the best inventory
position or transportation capacity. This allows WE PROVIDE W & D SERVICE to fulfil
customer orders efficiently and on time, while effectively balancing the workload between
facilities.
2.Channel Optimization based on Order Size:
Another situation where a flexible logistics operating system is justified is when the size of a
customer's order creates an opportunity to improve logistical efficiency through alternative
channel arrangements. This means selecting the most appropriate channel based on the
order size to achieve cost-effectiveness and efficiency in the distribution process.
In the case study, it is mentioned that for small consignments, an independent distributor
could be used, while for large orders, direct delivery would likely be more economical. This
exemplifies how a flexible logistics approach can be applied based on order size. By utilizing
independent distributors for small orders and opting for direct delivery for large orders, WE
PROVIDE W & D SERVICE can optimize its distribution channels to ensure efficient order
fulfilment.
3.Selective Inventory Stocking Strategy:
A flexible logistics operating system is also justified when implementing a selective inventory
stocking strategy. This strategy involves careful analysis of the cost and risk associated with
stocking inventory to determine which items should be placed in specific warehouses.
In the case study, it is suggested that selective inventory stocking can be implemented by
stocking selected items in specific warehouses while keeping the total product line stocked
only at a central facility. For example, high-demand products can be stocked in warehouses
located near the production facilities in South Africa, ensuring quick access and reducing lead
time. Meanwhile, slower-moving items can be centralized in a larger facility, reducing the
overall inventory holding costs.
4.Special Agreements and Arrangements:
