Plaza the logistics of Zaragoza Essay

The irresolution in carry is reflected in the reorder point and synthetic rubber stock. The more the variability in demand the higher will be the reorder point and the safety stock. A higher deviation in demand would directly prompt the safety stock levels required at the warehouses and hence cast up the breed carrying costs. This increase would then affect the overall costs. Using our excel model, If we increase the standard deviation of annual demand from 10,000 to 32,000, the overall costs for Rotterdam move higher than those of Zaragoza. Similarly, varying the service life has an impact on the good cost as it controls the safety stock which in turn controls the memorial property cost. Hence, as the service life increases to a higher order the cost of selection 2 (Zaragoza) will be lesser than option 1. Cost of the intersectionAs the cost of the product increases the inventory holding cost increases increasing the total cost. So Zaragoza as has a amend cost advantage over Rotterdam option. In our excel model, plugging a product cost of 295 Euros (E 47 and F 47 cells), keeping all other(a) parameters unchanged makes Zaragoza a better cost option. So it is a federal agent to be considered.RecommendationsBased on our above analysis, we recommend the following to the chief executive officer of Zaragoza Logistics Park (Who should they extend to sell their idea/option) Zaragoza should heading customers with high issue of units/TEU They should target customers with high product costsThey should target customers whose demand uncertainty is high They should target customers with high annual demand ratesThey should target customers who have preference for high service rates Plaza is in addition an educational center for logistics while Rotterdam is a just a logistics park. Zaragoza should try to educate the customer about the supply chain benefits of associating with a terra firma class logistics research center Plaza is a government O.K. firm t hey should use this factor to instill more confidence in the customer over a private firm like Rotterdam option