An Analysis of Possible Economic Benefits Accruing to Both Vendor and Customer Through the Implementation of Direct Plant Shipment

Author

Robert G. Buck, Fontbonne College

Year of Award

1985

Degree

Master of Business Administration (MBA)

College

College of Business & Professional Studies

Degree Program

Business

Department

Business Administration

Keywords

Just-in-time, Direct Shipping, Manufacturing, Wholesale, General Foods, Beverage, Powdered Soft Drinks

Abstract

The intent of this thesis is to explore the possible economic benefits accruing to vendor and customer through the implementation of direct plant shipment.

This author has found that, in a capital starved environment, officers of major corporations will generate new money by cutting inventories. Both just-in-time distribution and direct plant shipments offer a means of reducing or attaining asset management objectives. Another component of direct plant shipments is the aspect of freight and warehousing costs. In most instances, vendors can experience substantial savings by reducing freight and warehousing costs by coordinating shipments with customers directly from the manufacturing plants.

My hypothesis is that, by offering an incremental program as an incentive to chains and wholesalers, significant value could be shipped directly from the manufacturing plants. The volume attributed to this distribution process could result in significant savings for the vendor.

As lower unit costs are attained, both at retail and at wholesale, the customer would benefit through lower retail shelf prices. Historically, demand has been elastic relative to pricing action by the Beverage Division at General Foods. Potential volume growth could be projected, based upon savings and lower unit pricing at the retail level.

Document Type

Restricted Thesis

Recommended Citation

Buck, Robert G., "An Analysis of Possible Economic Benefits Accruing to Both Vendor and Customer Through the Implementation of Direct Plant Shipment" (1985). All Theses, Dissertations, and Capstone Projects. 603.
https://griffinshare.fontbonne.edu/all-etds/603