PLAZA: THE LOGISTICS PARK OF ZARAGOZA Case Solution
The additional cost associated with the logistic facilities would be the amount of TEU and could be considered as 145 Euros, the truck unloaded time was assumed to be 1.5 days to cover in the process. The total arrival charges for Zaragoza could be approximately 800 Euros and per load charges were considered to be 800 Euros.
The analysis shows that the total average distance covered in kilometres would be 516.1 for Rotterdam and 1220.7 for Zaragoza. The importance of option 2 could be considered as relatively high as compared to option 1 because the PLAZA was mainly focusing on the demand of Zaragoza.
The total transportation cost in the related study shows that Zaragoza is subject to high cost margins as compared to Rotterdam because it has higher transportation cost and additional charge of TEU. In the case of inventory holding cost, it shows relatively lesser amount as compared to Rotterdam and can be considered to be less than the overall inventory holding amount of the other.
The average inventory is calculated by analysing the replenishment order quantity for both the distances and shows that it can be the same for Rotterdam as well as Zaragoza. However, the lead time was different for both the warehouses and the standard deviation could be considered to calculate the deviation of the stocks for both the warehouses.
It has been determined that there is less difference in the safety stock for Rotterdam and Zaragoza, which shows that both warehouses could be similar in safety of their stocks which is calculated by multiplying the amount of stock subject to deviation into the expected value as given in the scenario.
However, the average inventory for the year indicates that Rotterdam has less value of inventory and can be considered as low in the overall inventory stock as compared to Zaragoza. The pipeline inventory cost shows favourable result for Zaragoza and can be considered as less efficient for Rotterdam.
The net cost of both the warehouses shows that Rotterdam has high cost value in logistic facilities and can be considered as less relevant for the scenario as compared to Zaragoza. It also indicates that PLAZA would definitely go for the costing of Zaragoza because it has cheaper cost of shipments and warehouse process. It has also determined that Rotterdamâ€™s cost will be approximately three and half times higher than Zaragoza, which shows that PLAZA had made the right decision to hold in this territory as the entire cost could be considered as favourable for the decision implemented by PLAZA.
Customer analysis on the proposed results
It has been analysed that the results show favourable for the customer to decide whether the distribution process will benefit or not according to their need of less cost price. The situation will be quite certain for them to analyse the heavy cost and variations of the external factors, however it can be uncertain for them if any natural disaster will come in the way of distance between the port and warehouse, which can increase the cost of major activities because of the late time to recover the transaction.
This is the only way for the customer to not judge the exact cost of delivery according to the external issues such as government intervention or economic factors which can lead to increase the relevant cost and their drivers like the price of petrol and increase the cost per distance covered.
If the major cost that is more connected to the overall results of activities will increase such as import cost, which can be increased through high tariffs and duties, then it can be hard to predict the proposed cost associated with the warehouse……………..
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