LOCATION CASE STUDIES Dr. Ron Lembke

Case Study: Importing from China to E. Coast

Customer Location

New Orleans $3, days NY / NJ $3, days Wilmington DE $3, days (door) Norfolk $3, days Charleston $3, days China to U.S. Container Rates Atlanta $3, days (door)

Roanoke Norfolk Philadelphia Baltimore Allentown Harrisburg Elizabeth, NJ Wilmington Drayage Rates

China to Long Beach

Cincinnati $2925, 21d Columbus $3000, 21days Atlanta $3300, 23d Memphis $2900, 18.5d Murray $3350, 22d Nashville $3300, 22d Louisville $3050, 20d Landbridge Data

Distribution Center Location Minimize demand-weighted distance: distance to each customer times the volume of shipments to the customer How many to build? Where to build?

Case Study: Retailer Location of a 5 th returns processing facility Addresses of 2125 Continental U.S. stores Location of 4 Return Goods Processing Centers List of all return shipments from each store, including pounds and # pallets Calculated actual highway distances from every store to its DC

Local Streets

Transportation Cost Approx. Current Pallets:205,254 Current Pallet Miles: 77.9m Cost / pallet-mile11.68 cents Pallet-Mile = 1 pallet traveling 1 mile Minimize average distance traveled

Current RCs

Dallas Realignment

Close 1 Existing RC

Summary Transportation costs are a huge factor  Street-level approximation of transportation distances unnecessary  “Straight Line” distances are usually fine  “Great Circle” distances take the curvature of the Earth into account Both inbound and outbound costs need to be taken into account