100%(16)16 out of 16 people found this document helpful
This preview shows page 1 - 3 out of 4 pages.
Case 9-1: Penner Medical ProductsSituation:1.Penner was a medical supplies distributor and retailer, supplying small andmedium-sized medical practices. --$30 million sales--120 employees--9 warehouse workers ($15 per hour)--5 retail locations and central warehouse-- Order from phone or website--30,000-square-foot warehouse2.Stinson Distribution Company is Penner's only supplier of medical offices'equipments.3.Missed delivery dates and incomplete orders from Stinson were resulting incustomer complaints and lost sales. In this way, it increased transportation costsand inventory holding costs (15 percent).4.Penner used truck to transports goods ($55 per hour), which increased fuel costs.--empty one-way trip to Detroit (9-10 hours) --fully loaded with goods ($15,000) back to Rockford 5.Penner shared the trips with other local businesses to cut down transportationcosts, but it was no effectively.6.Because of security, delays at the Detroit border crossing, and extending shippingtimes and costs for Penner (30-60 mins).7.Incomplete paperwork resulted in 25 percent of goods delay.8.Neil used UPS to handle rush orders from Stinson with premium costs, whichsolved paperwork problem and got products on time. But Penner needed to pay$1,000 per month to rent warehouse for shipments.Basic issues:1.Specialized transportation service options2.FOB terms and incoterms3.“Best Value” delivery decisions4.Key selection carrier criteria5.Documentation in freight shipments