Logistics Center Location
In this year’s strategy session, the management approved a significant change in the company’s operating model. PK Village will establish a central logistics center to receive and store the majority of the products purchased by the company.
The feasibility study, commissioned to a reputable consulting firm, demonstrates that the savings to be obtained by purchasing and transporting goods in larger lots exceeds the expenses of operating a logistics center, as well as the transportation costs of delivering goods to stores.
Other less tangible benefits of the proposed operating model, such as the reduction of store inventories of slow-moving SKUs, the elimination of multiple deliveries to the outlets, and the ability to schedule truck unloading operations at the stores during low activity times were also considered relevant by the management.
The management is now searching for an adequate location for the Logistics Center to serve the existing stores as well as the three new outlets planned to open in the next 18 months. The size of the logistics center is estimated in 25 thousand square feet.
The real estate brokers retained by PK Village have identified three available buildings in the South Florida market that meet the size and physical requirements to house the Logistics Center. The location and cost information for every one of these options are presented in the table below. Qualified labor availability and operating expenses for these three locations are considered comparable.
A competitive bid to select a trucking company to provide delivery services will be conducted. The target cost established by the management is $2.50 per mile.
PK Village Stores has retained your firm to:
- Complete a center of gravity analysis to assist in the selection for the optimal location. Use the information provided in Workbook 2.
- Provide a recommendation considering the three location alternatives identified by the realtors.
Deliverables:
- Prepare a one-page document containing a description of the opportunity, a list of assumptions, a description of the methodology employed, as well as your professional recommendations.
- Attach an Excel file supporting the findings.
Workbook 2:
PK Village Stores, LLCStore Locations and Delivery FrequencyStoreAddress
Delivery Frequency
(Trips per Week)
1
9695 SW 88th St.
Miami, FL 33176
52
350 Bird Rd.
Coral Gables, FL 33146
43
10721 SW 56th St.
Miami, FL 33165
24690 NW 79th St.
Miami, FL 3315035
1447 Alton Rd.
Miami Beach, FL 33139
46
722 Atlantic Shores Blvd.
Hallandale Beach, FL 33009
37
12351 Taft St.
Hollywood, FL 33026
58
2635 Weston Rd.
Fort Lauderdale, FL 33331
69
3398 N State Road 7
Lauderdale Lakes, FL 33319
310
1440 W Copans Rd.
Pompano Beach, FL 33064
211
4550 W Hillsboro Blvd.
Coconut Creek, FL 33073
412
1300 NW 2nd Ave.
Boca Raton, FL 33432
413 – New
8100 Glades Rd.
Boca Raton, FL 33434
514 – New
718 George Bush Blvd.
Delray Beach, FL 33483
315 – New
6555 W Boynton Beach Blvd.
Boynton Beach, FL 33437
2
