KKC management has decided not to overburden its customers with the transportation tariff, and therefore it incurs all the payment towards insurance of the goods and its safety; the customer is liable to only pay for the transportation charges upon receipt of the product.
As per the customer survey, less than 5percent of the customers have asked for delivery within period of 4days. In this case, we will try to satisfy 95percent of the customers by developing transportation strategy through which delivery can be made within 4days. On daily basis Houston, Minneapolis and Little Rock are the locations where less than 20units are procured on daily basis. In other locations, the average demand is more than 40units; therefore we would give Houston, Minneapolis and Little Rock relatively lower priority.
We are ignoring Little Rock and Minneapolis for daily shipment; therefore KKC will not post its cargo through to these locations directly through airline. KKC is advised to post its units from Houston to Denver, Little Rock and Minneapolis through trucks.
From the given figures, it is evident that transportation from Houston and Atlanta shall be feasible option for the company. Houston and Atlanta shall be the focal points from San Francisco and Los Angeles.