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Logistics Essay

750 words - 3 pages

Final exam logistics

1.) Ikea case: (the 3 main topics) a. Competition between suppliers The structure of Ikeas logistic creates a high competition between their suppliers. It is because Ikea is subdivided into (many) Trading Areas, which compete for the commissions the headquarters of Ikea (Ikea of Sweden) gives. Each Trading Area tries to find the best thus cheapest solution for producing and delivering a product, so each of them negotiate with their suppliers and make an offer to the headquater of Ikea. Of course the headquarters (IOS) pick the cheapest combination of producing and delivering (logistics). That is the way the headquarters of Ikea find the cheapest manufacture for ...view middle of the document...

This is also necessary to keep the flexibility, because as showed in a. there are many possible manufactures all over the world, which compete against each other to get the contract. If you consider this, it does not make sense to have several distribution centers.

2.) Valkyrie Case
Valkyrie outsources a part of their distribution to contractors. Those contractors are specialized in distribution and can do it cheaper. The costs for Valkyrie are also variable because they do not need their own distribution centers. Valkyrie lower their fix costs, while the total costs depends more on the amount of sales, which means lower risk for the company as well. The other part of the stock is delivered to retailers all over the world. In that case Valkyrie has only just a few distribution centers, more specifically three distribution centers, one for each region they operate in. There is one distribution center located in Denver serving the Northern American market, one in the Netherlands for the European market and one in Singapore for the South-Eastern-Asian market. Because Valkyries Distribution centers are located in countries, which are known for their big harbours (the Netherlands and Singapore), it is supposed...

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