Which of the following distribution strategies would be the most appropriate for the business-strategy change?

A company that produces standardized products and sells them through retailers via a responsive transportation system has decided to expand its sales with an online store for customized products.

Which of the following distribution strategies would be the most appropriate for the business-strategy change?
A . Local distribution centers serving retailers and online sales
B . Centralized cross-docking facilities serving retailers and online sales
C . A centralized distribution center serving retailers and direct shipment from the factory serving online sales
D . A centralized distribution center serving retailers with transshipment arrangements serving online sales

View Answer

Answer: C

Explanation:

The business strategy shift to selling customized products online necessitates a distribution strategy that balances efficiency and responsiveness.

Here’s the breakdown:

Current Setup: The company has a responsive transportation system serving retailers with standardized products.

Need for Customization: Expanding to online sales with customized products requires a different approach due to the variability and specific demands of online orders. Centralized Distribution Center:

Serving Retailers: Maintaining a centralized distribution center for standardized products ensures consistency and efficiency in supplying retailers.

Direct Shipment from Factory:

Online Sales: Directly shipping customized products from the factory to customers is ideal because it allows for better handling of unique orders and reduces the time from production to delivery. Efficiency and Responsiveness: This combination allows the company to continue serving retailers efficiently while meeting the customization demands of online customers effectively.

Reference: Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation.

Pearson.

Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2008). Designing and Managing the Supply Chain: Concepts, Strategies, and Case Studies. McGraw-Hill.