Companies may choose from one of many distribution strategies domestically or internationally. There are pros and cons involved in any of the distribution methods selected,the main pros include: fast distribution of products to their destinations, it reduces the costs of transportation by giving easy access to the products another advantage is that having multiple locations can save a trader time and money by giving them options to choose from to ensure they get the best deal.
The disadvantage of these approaches include increased overhead because it introduces a need for more staff, the strategy is not effective for vendors and the difficulty of controlling products which can end in out-of-stock challenges hence impacting on customer confidence.
The advantages of maintaining international distribution centers are: there is an added convenience for clients as they can easily access the products. The centers can then easily track changes in consumer preferences saving on market research costs.
The main disadvantage is the potential for political threats which might impact availability. Changes in government or government policies like tax-rates can impact on the productivity of companies.
II. Decision-Making Criteria
There are various benchmarks to selecting the location of a new warehouse. The ten criteria used usually comprise of the following features:
Facilities: This usually establishes the kind of space that is needed to achieve both long and short-term goals. Bulky goods would require a large warehouse and vice versa, while some may need specialized facilities like refrigeration therefore the warehouse must be situated near the market.
Labor analysis: This metric focuses on the level of skill involved which aids in the expenses involved in hiring of workers. Depending on the kind of the business one might choose unskilled labor if the tasks involved do not need know-how. Conversely, skilled workers will be vital where...