PERFORMANCE CONTROL

Performance control at Happy Chips, Inc



Performance control at Happy Chips, Inc

Introduction

Westminster Company is one of the leading manufacturing company of the consumer health product and through its distinctive name, company has recognized throughout the world. As it names suggest that this case finds the Westminster Company assessing the effectiveness and efficiency of organization logistic system design. There are various internal and external influences that made the organization to reconsider its current logistic system. Organization operates three separate distribution system which is allocated for its each domestics sales division. This may seems obvious that the consolidation of the system can significantly increase the efficiency of organization, on the same time there are number of constraints has attached to the company that make the determination as a complicated one.

Students have been encouraged to consider the different pieces of const information and number or qualitative factors in order to reach the conclusion for this case. As with the entire cases question, answers are not necessarily a clear cut thorough the responses that should be adequately justified.

Solutions to Questions

Answer 1

The way I see it as there are number of constraints has placed on the company. Consolidation of system would make it much easier for the transportation economies to be gained. Volume of truckload would be easy gathered to form the distribution centers, freight cost of customers and lowering transfers cost.

The effect of using the transportation and warehouse of third party on the customer freight and transfer cost will become less apparent (Hertz & Alfredsson, 2003). It is also likely that such cost would be higher in such type of scenario through inventory cost should be remain lower without any fixed investment and the overhead expenses of the warehouse. The transportation and warehouse of third party has often a one good idea that can mostly offer a better service in order to lowering a total cost.

Answer 2

There are the following effects that consolidation of warehouse may brought

Carrying cost of Inventory

This would be reduced because of better utilization of available facilities and require less duplication effort (Woo,et.al, 2001). The company has operates two warehouse, one is Los Angeles, CA (for Division B and C) and another one is Newark, NJ (for Division A and C). These are the clear candidates for the consolidation. Beside from any changes in the volume of product, the reduction is the facilities can separately ...