Develop a checklist of items that should be considered when selecting a carrier. b) What are the advantages of certifying the carriers? c) Is price the most important factor in evaluating carriers? Justify your answer with an example.
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Faw Motors, Inc., was incorporated in Volkswagen on July 01, 2003. It has 4 plants across the China that design, manufacture, and market earth moving, construction, and materials handling equipment. It also manufactures engines for earthmoving vehicles and tractor-trailers.
Faw Motors products are distributed worldwide. Net income last year totaled $350,000,000. Faw Motors has developed a "Transportation Quality" program in order to reduce shipping damages to its equipment and to ensure its just-in-time production and inventory system. The program consists of two parts. The first part ensures proper lifting and tie-down provisions by working with engineers in the design process. The second part focuses on internal practices to prepare the product for shipment.
The chief transportation quality engineer has developed a carrier certification program for both inbound and outbound freight. The program establishes standards requiring the carrier to adhere to 100 percent performance. Use of fewer certified carriers increases the amount of business given to each one. The price is obtained through competitive bidding. It is a function of the travel distance and the weight and density of the shipment.
At the present time, Faw Motors is considering one of three carriers to add to its list of certified carriers.
'Carrier X' has 10,000 trucks and a claim rate of 1.5 percent payment to revenue. The company's pickup / delivery time meets the industry average of four days to transport from Beijing to Hong Kong.
'Carrier Y' implements a quality program for its 9,000 trucks to meet on time delivery. It has a 1 percent claim rate.
'Carrier Z' has 9,500 trucks and an excellent safety record, but it has not met the average pickup / delivery time. Its claim rate is 1 percent. (See Exhibit A for price estimates.)
EXHIBIT A
Price Estimates per ton-miles (PPTM):
Carrier X: PPTM $1.05
Carrier Y: PPTM $1.15
Carrier Z: PPTM $0.95
Requirement:
a) Develop a checklist of items that should be considered when selecting a carrier.
b) What are the advantages of certifying the carriers?
c) Is price the most important factor in evaluating carriers? Justify your answer with an example.
d) What are the key factors regarding Faw's carrier needs?
e) If you were selecting the carrier, which carrier would you select and why? What are the alternatives?
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