RMG 434 Chapter 10: RMG434 Chapter 10.docx

• School: Ryerson University
• Department: Retail Management
• Course: RMG 434
• Professor: Emad Samwel

Document Summary

Responsiveness to customer-specific demand equals final configuration to be done very close to the customer, which increases the cost of products. Cost of a product with postponement done at a central location is cheaper than the cost of a product with postponement done at a local location near the customer. At some point, the shortage of available and qualified labour will cause the total labour cost to increase: inventory-carrying cost: it increases as the facilities number increases to reflect the amount of total inventory carried in these facilities. At a certain point, the cost of inventory. However, at a certain point, the service level reaches a maximum, and then any incremental increase in facilities does very little in terms of improving service level to customers. Direct shipment-fast shipment, low cost, no middle agent, warehouse cost, or holding cost of merchandise: high risk if the customer cancels order, and low responsiveness to customer.