A Comparative Analysis of the Major Alternative Configurations of Delivery Products Manufactured by Agnew Cheese Company Ltd
Direct delivery from Stranraer via Rosyth ferry service (Ace Transport). This option provides the lowest logistics costs for both delivery sizes: 26 pallet loads and 20. In addition to this, Stranger via Rosyth ferry service by Ace Transport allows Agnew Cheese Company Ltd to reduce lead times to 21 hours and gain a competitive advantage on the Benelux market. The purpose of this report is to provide the senior management of Agnew Cheese Company Ltd with a comparative analysis of the major alternative configurations of delivery of its products to the Benelux market. Based on the interaction analysis between the different distribution costs and how they vary with respect to the different alternatives (vehicle type, time, number, size, location) and logistics cost estimates (Rushton et al, 2004, 120) will be given the final recommendations. This scheme is currently used by the company but is considered to be not feasible anymore. Agnew Cheese Company Ltd uses selective distribution strategy focusing its distribution of their products in selected location – Benelux market (Browne 2013, 13). If to consider reduction of order sizes to 20 pallet loads, shipment will not fill a container and will require to be consolidated with other Less than Container Load (LCL) in order to economically fill a shipping container (Rushton et al, 2004, 354). The concept of LCL was taken into consideration while calculating the container/trailer/wagon capacity. Taking into consideration that average distribution rate in Europe is approximately 6% of the cost of the product, for Agnew Cheese Company Ltd it would be £45/pallet (6% of £750), the distribution rates of current operator of the Zeebrugge warehouse are very low even after 5% price increase.