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Rlc Computer Company

In: Business and Management

Submitted By meawheeler
Words 1160
Pages 5
RLC Computer Company (RLC) is an electronics manufacturer that produces high-value computers and distributes them in the US market. They distribute out of two Midwestern production facilities in Detroit and Cincinnati. Historically, all of RLC’s shipments move from each production facility to all major US markets via daily direct air shipments. The data provided to this consulting team indicates that RLC’s customers are all located in the Southwestern United States, which means that their Midwestern production facilities are geographically distant from their customers; this distance issue means that RLC is not operating efficiently because their shipping is not cost effective. Please see Exhibit A, which indicates that the total cost of air shipping based on current demand levels is $10,515 per day. Transportation costs make up a majority of RLC’s distribution costs, and will be used in this study as the basis for evaluating alternative distribution system strategies. RLC’s goals are to (1) reduce transportation costs, (2) reduce transit time to minimize the risk of lost sales, and (3) improve overall customer service. To meet these goals, this consulting team ran multiple scenarios aimed at optimizing the supply chain. RLC has already made strides to improve their distribution system, but are currently challenged as to how to make additional enhancements. Their “desire for a distribution system characterized by high-speed transportation and low in-transit inventory levels” has driven them toward improvements such as reducing/removing lag time from their order cycle (including order processing), removing warehousing facilities from the equation to reduce holding costs on inventory and lower the potential for damage, and speeding shipping to the customer in order to improve order cycle time and accounts receivable turnover. Therefore, it is our task to…...

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