Reference no: EM131381763
Optimal Channel Decision
1. Spark, a new vendor which manufactures electric bikes & boats has provided quotations for a few SKUs and their replacement batteries. Although introducing the products into the assortment seems promising (every Canadian Tire store is expected to order ten units of each product this year), a decision will need to be made as to which channel is most profitable.
You will find relevant information in the spreadsheet shared with you via email. Can you assist our Merchandising team in determining what the optimal channel should be for each SKU?
What would be the estimated difference in cost for shipping an individual unit of bike #2 direct from the vendor to all stores compared to shipping it out from our DCs in the storage channel?
2. If Canadian Tire decided to proceed with only the boat SKU and the channel that would offer the quickest service to stores, how many stores should be serviced from each of the vendor's two available manufacturing facilities?
3. Spark has been growing rapidly and have plans to expand their operations by building new facilities in Vancouver, Montreal, and Halifax. They have offered Canadian Tire the option of shipping product directly to stores from these new locations in the near future. To help determine the optimal vendor facility to Canadian Tire store mapping, could you help outline what a linear program to find the best solution may look like by identifying key variables, constraints and an objective function?
4. Was there any information that you felt was missing which may have helped make a better decision in questions 1 & 2 above?
5. Was there anything in the data provided that appeared to be incorrect?