Supply Chain Management

A hardware manufacturer signs a contract with Home Depot to provide wood screws. The manufacturer has 3 supply locations. They need to deliver to 12 Home Depot stores. Each supply location ships 100,000 boxes per year per to each of the 12 Home Depot store. The trucks can delivery up-to 20,000 boxes and cost $1,000 per load plus $250 per delivery. The cost of holding one box in inventory for a year is $1.00. The supply chain manager of the hardware manufacturer is considering whether to use direct shipping from the supplier locations to retail stores (full truck loads in each shipment) or setting up milk runs from supplier to retail stores (without a distribution center). In each milk run, a truck may deliver to 2,3, or 4 Home depot stores.

a.What is the total cost (inventory holding + truck cost) for direct shipping option?

b.What is the minimum total cost for milk-run using full trucks? Calculate the total cost for a truck delivering to 2,3, or 4 locations.

c.What is the suggested shipping option? If the demand increases to 150,000 boxes per store, would your option change? Why or why not?

 

Sample Solution

the defendant in the exact same position they would have been before the accident. Also, to be awarded damages a duty of care must be proven which may dismiss some negligence cases. An example of this is the Hillsborough disaster case, the tragic events at Hillsborough Stadium during the FA Cup semi-final in 1989 resulted in the deaths of 96 people, injuries to hundreds of fans and traumatised many more. If the claimant was in the area of danger or at risk of danger, then to claim they must have suffered a recognised psychiatric disorder, and there must be reasonable foreseeability of the risk of physical injury following the defendant’s negligence, even if psychiatric harm itself was not reasonably foreseeable. However, in relation to proximity, it was presumed that only parents and children, spouses and engaged couples possess such ties. This means relationships between siblings were not presumed to fulfil this condition. In the Alcock & ors v Chief Constable of South Yorkshire (1992), Brian Harrison was at Hillsborough and witnessed the crush in the Leppings Lane End knowing his two brothers died. He failed in his claim because of the lack of presumed close ties of a relationship, as prior to the case it was not known that such a bond needed to be proved. Another negative is that the amount awarded is often inaccurate as the amount is based on estimation. Overall, compensation is a good reward as it tries to put the defendant in the same position as far as money can do because it is not physically possible to amend the situation completely.

In compensation, both pecuniary and non-pecuniary damages need to be calculated. Pecuniary damages, also known as special damages, are those which can be exactly calculated and are often agreed between both parties prior to trial. Whereas non-pecuniary damages are those which are designed to compensate for the kinds of damage which cannot be calculated, such as the pain and suffering received. A positive of pecuniary damages is that it because it can be accurately measured this means it puts you back exactly to the financial position that you were in originally before the accident. Also, contributory negligence is included which means the blame is disputed accordingly. If the claimant contributed to the loss or damage through their own negligence then the burden of proof is on the defendant to demonstrate this. Anot

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