Fireside Tire Company: Case Study Latrice Alston GB 570 Professor Craddock February 22, 2011 Fireside Tire Company: Case Study Fireside Tire Company faced with the challenge on deciding which location is more advantageous to move product using a centralized distribution center. The following locations have been selected as possible locations: Atlanta, Chattanooga, Tampa, Birmingham, Miami, Jacksonville, Columbia, Charlotte, and Raleigh/ Durham.
Currently, the distribution center in Atlanta average distance for shipment in 330 miles with costs of $217,000. From a logistical standpoint and based on the vertical and horizontal grid coordinate of 1533 (horizontal) and 638(vertical), Atlanta is not necessarily the best choice. The mathematical computation to find the grid center is the result of dividing 443,330,800 by 289,870 to arrive at the horizontal grid center of 1533 and by dividing 184,889,500 by the same denominator to arrive at the vertical grid center of 638.
Chattanooga’s grid coordinates appear based on the data, closer in proximity to Fireside’s customer base. Comparatively, the other sites for the distribution center such as Miami appear attractive based on the vertical grid coordinates but would not be advantageous based on the horizontal grid location. According to Coyle, Langley, Gibson, Novack and Bardi, (2008): The transportation rate pulls the location toward the location of the commodity of higher rate.
Thus the higher rates of finished goods will draw the least-cost locations toward the finished goods market and thereby reduce the distance the company moves these higher-rated goods (pg. 544). As an organization attempting to goods to locations from various points, Fireside Tire Company using the grid technique is sensitive to any changes in the industry that could change least – cost location.
A suggestion to Fireside Tire Company is to develop a contingency plan to allow the organization to remain competitive and profitable if variables such as freight cost or production cost increase. All things being equal, the location in Atlanta serves to effectively meet the needs of the organization. Additionally, the location in Atlanta is suitable to serve as the location for distribution. References Coyle, J. , Langley, J. C. , Gibson, B. J. , Novack, R. A. , and Bardi, E. J. (2008). Supply Chain Management: A logistics perspective. South-Western Publishing. Mason, Ohio