satisfactory site? Modern warehouses, similar to manufacturingEssay

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¶ … satisfactory site?

Modern warehouses, similar to manufacturing plants, are often located in suburban or rural areas where the cost of land is significantly less and there is access to main highways. Usually the warehouse is a long, flat, and often one story building, instead of older multi-story buildings that are regularly seen in downtown areas of numerous cities. With this type of building, there is no need to build and maintain passenger and freight elevators, nor to build stairwells and staircases. This type of construction also means there is no added costs to reinforce/fortify floors to increase their load handling capacity. Excellent floor layouts also mean that within these single level buildings - plus the wide aisles - forklifts and other tools and equipments can move about skids and pallets of merchandise rather easily. Moreover, because the internal movement of stock can flow in a straight course without the need to move up and down different floor levels, the goods can come in through one end of the single floor layout, become stored in the centre of the structure, and leave the building through the other end. Thus, operations tend to become more efficient (Bizmove, n.d.; Shanks & Simmons, n.d). The factors that one needs to consider to assess whether a warehouse site is satisfactory or not include the following (each discussed separately): The Labor Force; Transportation; and Other Factors.

The Labor Force -- the available labor force is a crucial factor in the analysis of the site. Lately, many individuals are willing to commute great distances to work. Many firms usually operate by the notion that if the site's location is good, then at least ten people will present themselves for consideration for every one that will eventually be employed. One of the other important factors to consider is the average wage for the location. This particular wage rate should also be compared to that which competitors pay their workers. Small towns often have lower wages and individuals with better work ethic. A further consideration with respect to hiring concerns whether a firm will require unskilled or skilled employees. If the local residents are not suitable, then the conduciveness of the location to attract the qualified employees should be considered. Often, unskilled workers will be more likely to move to new areas for work (Shanks & Simmons, n.d).

Transportation -- the available transport to the warehouse site is one of the other factors that should be considered when choosing a business location. The transportation means that will be needed for the firm, or by its clients, in accessing the business include close proximity to major roads, railway lines, or airports. The cost of delivery to clients should also be determined (Shanks & Simmons, n.d).

Other factors -- some of the other factors that should be considered when choosing a business site should be regional costs. These entail the costs of electrical power, water, waste disposal, taxes, land, and construction. The location plays an important role in the image that the business portrays. The initial costs of land should not be given too much consideration. The difference in costs between different sites is not large after it is spread throughout the life of the business. The case is the similar for other one time fixed costs. It is crucial not to allow personal preferences, which are often emotional rather than logical or rational, to interfere with our decision making processes (Shanks & Simmons, n.d).

After analyzing the aforementioned factors, it is critical to utilize a score sheet to evaluate the comparative values between different sites. The score sheet enables one to assign ratings to singular factors enabling one to determine the strengths and weaknesses of the site. A weight should also be assigned to each of these factors, with consideration of the fact that some factors will be more important or significant than others (Shanks & Simmons, n.d).

2. What items would need to be kept in stock, and the optimum stocking level of each?

The Stocking Plan

After determining the general categories of merchandise the warehouse is to store, the retailer then splits the general categories into smaller categories referred to as classifications. The classifications are then in turn divided into sub-classifications. A unit stock strategy of the number of goods to be stocked in each is then prepared. The purpose of this move is to make sure that the stock will represent a collection of goods that will meet the wants and needs of a broad section of the targeted end consumers. One component of a stock plan approach is the basic stock list, also known as a model stock. These are the never-out items or 'musts' that may also be referred to as 'bread-and-butter' stock items (Bizmove, n.d.).

The number of goods in all stock plans ought to be multiplied by the price line to get the total dollar value of the planned inventory. Adjustments need to be made to the stocking plan if insufficient financing precludes ambitious stock assortment plans (Bizmove, n.d.).

The Buying Plan

One of the most crucial aspects of market penetration is to possess items in stock at the times when customers want to purchase them. This means going to the market to buy goods early enough to make sure that delivery to the store is done at the right time. Purchasing goods for a retail store requires prior planning to determine the stock needs for each month and then making commitments without any procrastination. Because retailers provide new merchandise for sales months before the actual calendar date for the start of a given new season, it is important that purchasing plans be made early enough to allow for intelligent purchasing without any last minute panic buying. The main function for this early offering for sale of new merchandise is that the retailer perceives the calendar date for the start of the new season as the merchandise date for the completion of the old season (Bizmove, n.d.).

The duration following the calendar date for the start of the new season is utilized by the retailer to sell job lots, closeouts, irregulars, imperfects, seconds, off-price purchases, markdowns from regular stocks, and distressed merchandise (Bizmove, n.d.).

In summary the Buying Plan should show:

When one should visit the market to see, assess, and analyse new offerings for the upcoming season.

The timings of the commitments

When the first delivery should be made to the store (Bizmove, n.d.).

The Selling Plan

The selling plan is closely linked to the buying plan. Once goods have been purchased, plans must be made to make sure that the greatest numbers of units are sold during the duration of customer interest and acceptance. The selling plan should include:

a) When merchandise should be marketed through advertising, or displays, etc.;

b) When the inventory should be taken to the maximum;

c) When no more reorders should be placed;

d) When markdowns should be made for regular stock;

e) When the merchandise should no longer be stocked (Bizmove, n.d.).

The individuals who purchases merchandise for a retail store should evaluate the time when merchandise should be purchased, when the merchandize should be introduced, the time it should be reordered, the time it should be marked down, and when it should be taken out of stock. This process can be compared to tidal waves-which go up and down. In terms of merchandising it is known as the ebb and flow of merchandise. The old must be sold or it must go and be replaced with the new (Bizmove, n.d.).

The Unit Control Plan

To dispose of unwanted items and maintain in-stock position of wanted items, it is important to create a sufficient form of control over the merchandise that has been ordered and that which is already in stock. For small retail traders there are quite a number of simple, inexpensive forms of unit control including;

Eyeball or visual control-allowing the retailer to examine the inventory visually to assess if there need for additional inventory;

Tickler control-that allows the retailer to physically count and add up together a small fraction of the inventory each day, such that each segment of the inventory is counted after a certain number of days making it regular.

Stub control-which enables the retailer to retain a fraction of the price receipt when an item is purchased by a customer. The retailer can then utilize this ticket to note down the sold items; and lastly;

Click sheet controls-that enable the retailer to record each item sold on a sheet of paper. All these type of unit controls are utilized by retailers to reorder purposes (Bizmove, n.d.)

For a large retailer more sophisticated and technical forms of unit control are required. These include:

Point of sale terminals which send data to the computer of the items sold. The buyer receives data printouts at determined regular intervals for review and action if need be.

Off-line point-of-sale terminals which send the data directly to the suppliers computer, which in turn… [END OF PREVIEW]

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