Proj 410 Case Study 14


PROJ410 – Case Study 3

5n advanta$e o# usin$ &ot' truc,in$ and are'ousin$ su""liers is t'at a com"any can convert a lar$eamount o# #i.ed costs to varia&le costs 'ic' reduces a com"any2s &rea,-even "oint ma,in$ it less li,elyto succum& to a dro" in &usiness) *'e su&stantial #i.ed costs in t'is area include are'ouse #acilitiesstora$e rac,s #or,li#ts tractors trailers and maintenance #acilities) 9y eliminatin$ t'ese #i.ed costs acom"any can also ac'ieve a su&stantial im"rovement in its return-on-assets measurement) One "ro&lemit' t'is scenario is t'at t'e amount o# #i.ed costs only dro"s 'en t'e com"any actually sells o## its#acilities and e!ui"ment) Ot'erise t'e com"any ill 'ave to maintain t'em 'ile still incurrin$de"reciation e."enses and "ayin$ a su""lier to "er#orm t'e truc,in$ and are'ousin$ services) *'ere#oreas lon$ as assets can &e ra"idly dis"osed o# a com"any can cut into its &rea,-even "oint &y sitc'in$ itsare'ousin$ and truc,in$ #unctions to su""liers)5 are'ouse su""lier is use#ul #or t'e com"any as it ants to use a lar$e num&er o# distri&ution "oints as#inal assem&ly areas) Com"any ill &e a&le to &uild t'e smallest num&er o# com"onents to stoc, andstorin$ t'ese com"onents at a ide ran$e o# distri&ution locations 'ic' are t'en assem&led accordin$ tocustomer s"eci#ications at t'ose locations) *'is results in t'ousands o# "ossi&le "roduct variations &ein$s'i""ed it' a minimum o# inventory) *'is ill allo t'e com"any to reduce its investment in inventory'ile $ettin$ #inis'ed "roducts to customers sooner it' no additional investment) Multi !ui"mentManu#acturin$ %td can s'i#t inventory amon$ a multitude o# locations as customer demand s'i#ts over timeso it can o##er t'e s'ortest "ossi&le delivery times) Maintainin$ a lon$-term relations'i" it' a t'ird-"artylo$istics "rovider ena&les com"anies to rea" si$ni#icant &ene#its #rom outsourcin$)

Cost savings report

-Savin$ o# o"eratin$ cost o# +00 truc,s #leet :Cost ran$es #rom 400 to +00;truc, "er mont'< =USD +00 > :5vera$e USD 4+0 "er truc,< > 1? = USD ?)@ million-Cas' 8enerated out o# sellin$ +00 truc,s to t'e su""lier;vendor or a t'ird "arty-6nsurance cost Saved = USD +00 > ?+000 = USD 1?)+ million-Savin$ Aare'ouse and 6nventory carry cost : +0000 S! #t o# are'ouse s"ace > USD B "er S! #t "er mont'< = USD 3)B million-Aor,ers em"loyed #or loadin$ and unloadin$ truc,s can &e em"loyed some'ere else in t'ecom"any and t'us resultin$ in cost savin$ o# : 100 or,ers > USD +0000< = USD + million-5dditional Cost savin$ o# ot'er e!ui"ments involved in t'e are'ousin$ and truc,in$ = USD 1million

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“Establishing a procurement strategy – New concert hall”
This assignment has been designed to enable you to prepare a report style paper on two currently used UK construction procurement methods that would be applicable to the example scenario below. Upon presenting the two most suitable options you should then suggest which one would be most suitable for the scenario given. Your assignment is outlined below.
Construction projects, establishing a procurement strategy
Many clients to the construction industry will often face a steep learning curve on their construction project or programme. To establish a valid and robust procurement strategy at the outset is considered a key aspect to achieving a successful outcome…show more content…

Therefore the cost certainty is highly advised to be implemented.
On the other hand, life cycle costing and value for money management should be done; in order to ensure that long term maintenance costs and the major



components for the projects have had the life cycle cost exercise. The scenario shows there is limited fund to the projects, therefore lump sum contracts are advised to be used in this case.
In Conclusion, Project Cost is showing as a major factor in this scenario; therefore the price certainty has been given (5 out 5) to indicate the overriding criteria.


Assuming the quality level required in the scenario is high level quality, as there is a need to have an operating building and to use the auditorium, bar, restaurant and the open exhibition areas which assumed to generate revenues will assist in the operating costs for the building, considering the need to control the quality in both the design stage as well as the construction stage; therefore the need to assign the client design advisors came up on the surface. In addition to that, the shape for the building which include proposed attractive places, such as auditorium, restaurant and bar, shall be in a good shape, which require high quality, as well as the functionality of the auditorium might require special skills within the

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