Designing a warehouse and transportation network in a cost-effective supply chain system - Essay Prowess

Designing a warehouse and transportation network in a cost-effective supply chain system


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Warehouse Design, Stocktaking, and Packaging Design

Question One: The key factors to consider when designing a warehouse and transportation network in a cost-effective supply chain system


The key factors to consider when designing a warehouse and transportation network in a cost-effective supply chain system include the number of warehouses to be included in the supply chain system, the specific or optimal location of every warehouse, and the application or use of space warehouse. The number of warehouses and the capacity of each warehouse are the primary factors to consider; these factors will impact the costs of distributing goods to the warehouse, efficiency, conveniences, and the organization’s service delivery. The essay will look at applications of relevant theories and means of assessing the efficiency of warehouse network system.

Location Next To the Customer

A warehouse location is essential; locating a warehouse next to the customer will improve efficiency and conveniences and, at the same time, ensure speedy delivery of goods. The company should consider locating the warehouse close to the market or the customer for several reasons; some of the reasons are to ensure perishable goods reach the customers in time and ensure customers get a continuous supply of goods without delay (Rob, 2019). Locating a warehouse net to the customer should also include a courier consideration. When a company is using courier services to deliver its products, then locating the warehouse next to the courier will increase efficiency and improve conveniences because the courier will not have to travel to collect the products from another place far away from the market (Rob, 2019).

The requirement to locate the warehouse next to the customer impacts the capacity decisions when designing the warehouse (Rob, 2019). The number of goods required by the customer continues to increase as per the market’s population or reduce subsidiary goods and reduce competing firms (where there are no other company supplying similar goods). As the number of goods needed per specific market increases, the organization will need to build a higher capacity warehouse to store goods next to the customer, or market and courier (Rob, 2019).

The requirement to locate the warehouse next to the customer also impact the number of warehouses needed. It is practical to increase warehouses due to higher demand in a specific area or market (Rob, 2019). Having a higher number of warehouses in a location ensures the customers get a continuous supply of goods with limited depletion chances. The customers will always find the goods and products they need for the sport (Rob, 2019).

Handling Of the Goods in the Warehouse

What happens in the warehouse also serves as a major factor in the warehouse and transportation network design. What happens in the warehouse encompasses the receiving of goods, the storage of products, and the dispatch (Rob, 2019). Time of handling all activities is essential to ensure convenience. Goods need to be handled within the schedule to ensure rotation of products from one market to another is as safe as possible and, at the same time, speedy handling of goods to ensure customers’ satisfaction (Rob, 2019).

Handling of goods in the warehouse also needs to be fast, considering manual handling or automated handling. Companies dealing in perishable products should employ more machines and automated system handling to ensure speedy and reliable processes (Rob, 2019). Manual handling in most cases delays product delivery because of human error and break or rest-time. The company will need more workers in the manual system to ensure a smooth process, which in the long term is not cost-effective (Rob, 2019).

In-bound Logistics

Supplier location is a critical factor when considering the size and location of the warehouse. Because most suppliers are unreliable, the company may choose to locate the warehouse next to the supplier location to improve convenience (Rob, 2019). And because some products need a quick process, such as fish, the decision to locate the warehouse net to the supplier will be most appropriate.

Design and Capacity

After considering warehouse location and number, the organization needs to look at the design and the capacity of each warehouse (Rob, 2019). The following factors impact the design and capacity of the warehouse;

  1. Warehouse activities include receiving, storing, packing, or picking products and dispatch. The warehouse design should consider the availability of space for each process of receiving, handling, and dispatch goods and products.
  2. Characteristics of products; the product’s characteristics also impact the design if the product needs special treatment such as refrigeration and vehicle assembling. Organizations should consider the fragility or hazardous nature of products when designing the warehouse. Some products need to be stored in cartons or pallets, while others need temperature-controlled areas and environmental guidelines; hence those factors will impact the design and capacity of each warehouse.
  3. Seasonal products- products such as maize supply are seasonal; hence the organization should construct a large warehouse to store huge quantities when they are available.
  4. Handling of returns-Some products like bread or electronics and machinery may be returned when expired or when the machines and electronics fail to function properly after purchase. The company should consider enough space to store returned goods and products.

Measuring of Warehouse Efficiency

FAST concept- the concept enables the organization to measure warehouse efficiency in terms of the following;





The flow in a warehouse includes the handling process where goods are received, processed, and dispatched. The flow of goods on products in the warehouse is essentially the same as accessibility. Space should be enough and appropriate for the nature of goods or products. Throughout is a concept concerning the general layout; the layout and design should ensure proper handling and quick dispatch (Rob, 2019).

Warehouse efficiency can also be measured by the level of satisfaction to customers and the satisfaction to suppliers. It can also be measured by returning to the company considering proper handling of goods, speedy delivery, and proper storage (Rob, 2019). A good warehouse design should deliver higher or maximum returns to the company; goods should be quickly received and dispatched to the market as per the market requirement. In addition, customers should be satisfied, and there should be no shortage of goods in the market due to poor supply chain systems (Rob, 2019).


The essay discussed the factors to consider in the design of warehouse and transport network design and examines the design that ensures cost-effectiveness. It expounds on the warehouse’s space and location, where the warehouse location involves constructing it next to the customer or next to the supplier. Other factors discussed are the nature and properties of products, including products stored in temperature-controlled areas and require a specially designed warehouse. Warehouse efficiency can be measured by output and level of satisfaction to customers and suppliers, and all the factors ensure no shortage of goods to the market and running of a smooth supply chain network.


Rob, O. (2019). Key Factors to Consider When Planning and Designing Warehouses. Retrieved July 24, 2021, from

Question Three: The essay explains the theory of stocktaking and highlights the need or its importance to the organization


The essay explains the theory of stocktaking and highlights the need or its importance to the organization. It also mentions technologies applied in stocktaking, considering the advantages of such methods or technologies. Stocktaking is the process of counting the warehouse’s stock to establish the number of inventories or products received, stored, and dispatched daily or timely. The stocktaking is important because it ensures proper stock management to control overstocking, under-stocking, or regular ordering of goods and minimizes costs. The essay examines the functions, importance, and technology that can improve accuracy and integrity in stocktaking and at the same time highlights the Just-in-time ideology and deterministic process review concept.

Theory of Stocktaking

The stocktaking theory aims to improve return and minimize costs related to stock taking process; the issues to consider are the optimal and accuracy in stocktaking, ordering, and dispatch. The theory examines issues such as overstocking and under-stocking of goods, accuracy in stocktaking, and frequency of ordering (Nicole, 2021). It also captures and analyzes the importance and the need to maintain stock integrity in the warehouse to ensure accuracy and limit chances of overstocking or under-stocking (Weedmark, 2021).

The warehouse needs to order approximately what the customer needs in a given period or what the customer can consume. The accuracy of stock-taking directly impacts the decision to order optimal stock for customer consumption (Weedmark, 2021). Inventory control calculations were implemented to ensure manual stock counting concurs with the bookkeeping records and mathematical forecasts. Modern technologies are also implemented to ensure accuracy (Nicole, 2021).

Frequent stocking is not cost-effective because the company will be subjected to various costs related to transportation and restocking. It can lead to temporary shortages of goods that also create customer dissatisfaction and an unreliable supply process (Nicole, 2021). The company should employ relevant stocktaking calculations to ensure enough stock are available in the warehouse and eliminate frequent stocktaking challenges.

Under stocking is also impacted by inaccurate stock taking. Having employees that ensure assume duties or boycott stocktaking and guess figures cal lead to under-stocking or overstocking (Weedmark, 2021). The company will order fewer goods than needed in the market. Under stocking creates unwanted shortages of goods in the market and increases related costs or reordering products, and at the same time, the company can  lose its customers to competing firms. Seasonal products impact the decision of inventory storage and stock ordering. Therefore, maize and other agricultural products should be stocked appropriately during harvesting seasons until the next harvesting season (Weedmark, 2021).

Overstocking creates challenges for the company by having too much inventory in the warehouse and stocking unwanted perishable goods. Perishable goods expire quickly, making the company incur losses due to poor stocktaking methodologies (Nicole, 2021). Stocking excess inventory in the warehouse leads to high costs of handling and low productivity by the company due to idle inventory. The company should employ accurate stocktaking techniques to eliminate chances of overstocking.

Maintaining stock integrity and accuracy helps the company avoid related costs such as holding costs, shortage costs, lost revenue, salvage costs, and time value of money costs. Holding costs include insurance and protection costs, storage space costs, and taxes. In addition, having excess stock due to poor stocking’s techniques or inaccurate stocktaking leads to excess handling costs (Nicole, 2021). The company will lose revenue in the event employees are corrupt and stealing of stock is involved. Integrity in stocktaking is mandatory to ensure the company does not lose money in cases related to a high number of goods in the warehouse. Proper record-keeping and follow-up in the supply chain are necessary to avoid theft in inventory management.

Salvage costs involve selling stock or products at discounted prices to avoid a near expiry experience (Nicole, 2021). The time value of money impacts the decision to order products and the number of products to order. Money loses value during inflation; hence to avoid such a situation, some companies overstock seasonal products to avoid stocking when prices are high.  Companies stocking devices subjected to regular upgrades may lose their money due to changes in technology. As a result, the company will have to incur upgrade costs or holding costs.

Just-in Time Inventory Concept

The concept helps to order products just in time of need. It ensures there is no overstocking of products and, at the same time, eliminates overhead costs, handling costs, insurance, and storage costs. Thus, the concept advantage is cost reduction; disadvantage involves a shortage of supply of goods to the market (Weedmark, 2021).

The deterministic Continuous Review concept involves keeping stock in the warehouse and order when the stock level starts to go down or drops. It is a real-time theory that helps to replenish stock as soon as the level drops (Weedmark, 2021). It’s advantageous because it helps to maintain average stock levels. The disadvantage is the high cost of regular stocking and ordering.

Technologies in stocktaking; Material Requirements Planning (MRP)

The MRP is a push inventory system technology aiming to predict the type of products the customer wants and determine the quantity needed. It is a system for ordering inventory, restocking, shipping, purchasing, and dispatching. It ensures goods are available in the market in the quantity or volume required by the customers (Nicole, 2021). The disadvantage of the system is inaccuracy prediction due to fluctuating customer demands. MRP introduces optimal productivity, integrity, accuracy, and efficiency in stocktaking. This technology is supported by barcode and radio frequency identification (Nicole, 2021).

Barcode and radio frequency identification help track stock and manage the ordering and supply of stock in the supply chain system (Nicole, 2021). The barcode and RFI provide enough data to generate accurate reports that are advantageous to the organization concerning stocktaking and forecasting customer demand (Nicole, 2021). The disadvantage of barcode and RFI is double coding due to computer error.

Other advantages of Barcode and RFI include;

  • Accurate recording of stock
  • Elimination of time wastage in manual stock taking
  • Elimination of manual errors and mistakes
  • High speed scanning and automation of stock updates
  • Keeping or records and history of stocks properly for quick tracking
  • Proper documentation and reporting
  • High return on inventory
  • Increase movement and handling of inventory in the warehouse


The essay discusses stocktaking theories and the importance of stocktaking integrity. The theory expounds on the importance of stocktaking, its functions, and its relevance to the company. Overstocking concept and under-stocking are critically discouraged in the discussion, and much emphasis is put on controlling stock to minimize costs and properly avails enough products in the market. It also discusses the concept of Just in time and deterministic Continuous Review. It examines the advantages of accuracy in stocktaking and, at the same time, examines alternative technologies used in stocktaking such as barcode and radio frequency identification. The essay provides the advantages of using technology in stocktaking, such as proper recording and documentation, accurate inventory management, improve transparency in stock tracking, and elimination of time wastage in manual stocktaking.


Nicole, P. (2021). Types of Inventory Control Systems: Perpetual vs. Periodic Inventory Control and the Inventory Management Systems That Support Them. Retrieved July 24, 2021, from

Weedmark, D. (2021). Theories on Inventory Systems. Retrieved July 24, 2021, from

Question Six: examines the theory of logistic packaging design and state relevant factors in selecting packaging design and outlining the difference between open and close-up loop systems


The essay examines the theory of logistic packaging design while considering relevant factors in selecting packaging design and outlining the difference between open and close-up loop systems. It provides alternative methods for repackaging and recycling to ensure the proper application of limited materials. It discusses the durability concept, affordability, availability, and legal consideration. The differences between open and close up loop systems are highlighted with examples when the open system involves partly recycling or recycling to different use and application and close up loop system is total recycling of packages to the same use. It highlighted the environmental concerns and regulations requirement and weakness leading to improper application of close up a loop system.

Theory of logistic packaging design

Packaging design theory covers packaging techniques, including the use of wrappers and containers. It examines the functions of packing, the need for packing, and the design of appropriate material needed for packaging (Malik, 2021). The function of packaging is to serve as an extension of the product for sale; it offers protection requirements and storage specifications for the product till expiry. Product packaging gives the item features or looks that improve sales to customers. It contains partners’ and manufacturers’ labels and instructions on the product ingredients and use. The packaging design concept includes the necessary graphics and package sizes prescribed by the law regulating proper packaging (Malik, 2021).

Packaging is needed for the health and protection of the products. Also, it helps in product identification and tracking (, 2020). It eliminates products similarities concept because each company differentiates its products through packaging design. The objectives of packaging are to ensure protection, differentiation, and proper storage of the product (Malik, 2021). In the case of food staff listed on the supermarket shelves, companies improve their sales by ensuring proper packaging of their brands and products (Vahid, 2014). Brand loyalty is maintained through continuous recognizable packaging design. It ensures customers do not change preferences, taste, and loyalty due to changes in packaging design (, 2020). The function of the packaging design is to promote the product by attracting customer attention and conveying an easily identifiable image. The design should look clean, easy to handle, and should not spoil easily.

The theory of logistic packaging design also highlights the advantages of packaging considering the competition in the market and health concerns. Packaging is advantageous to the companies because it does a sales job and also protects the product while decreasing the costs, creating product uniformity, and maintaining product hygiene.

When selecting a suitable packaging design, key factors to consider include graphics, company image, and Trade Mark. It also includes customer preferences related to color and ease of handling. Other factors include packaging material advantages such as transparent polythene to package food, bread, donuts, and ad fruits instead of paper (, 2020). Or using plastics in areas where environmental agencies and the government prohibit plastics from conserving the environment.


The choice of packaging material should ensure the materials used are secure and durable. Milk products should be packed well to ensure they last long, even in areas where coolers, and refrigerators, or proper storage facilities are not available (, 2020). Products being shipped or transported to far locations by seas or air should be properly packaged to ensure they do not expire during shipment; such products include perishable agriculture products, glass materials, and chemicals (, 2020).


The company can use any packaging material so long as appropriate and consider the cost of packaging concerning the return from the product (, 2020). Most companies will avoid more expensive packages and use cheap packaging to ensure customers can afford the products. Soft drinks like juices are not packaged in glasses; instead, the companies use plastics to minimize the cost and ensure the products are affordable (, 2020).


Packaging materials readily available in the market are employed by most companies; the cost of importing special packages or materials are high, especially in third world countries; hence they rely on polythene and paper, which is readily available (, 2020). Moreover, they avoid using the latest technology, which is expensive and is not available in their countries (, 2020).

Legal consideration

Many countries conserving the environment prohibit the use of polythene material for packaging. The state provides policies and regulations that guide packaging materials such as chemicals, foods, and perishables (, 2020).

Differences between open and close-up loop system

The goal of the close-up loop system is to ensure all materials are recycled to their original use after reaching the end-user (Electricalengineering.xy, 2021). The close-up loop system has fewer waste products than the open loop system because, in the open loop system, only portions of the product can be recycled after t reaches the end-user (Larry, 2018). The close-up loop system aims to ensure supply chain sustainability much high than the open-loop system. A good example is the total recycling of plastic bottles of water instead of making new ones with virgin materials (BluePrint, 2021). At the same time, energy consumed in the plastics’ recycling process is less than the energy used in making new plastics (Electricalengineering.xy, 2021). The challenges in implementing a close-up loop system are the lack of enough education and little demand for post-consumer recycling programs. Some consumers throw all plastics in one bin when different plastics cannot be recycled together (Larry, 2018). The time needed for sorting waste materials is tedious and costly for start-up recycling companies (Larry, 2018). A close-up system requires participation and education of all parties, including manufacturers, end-users, and end recyclers. Other examples of close up systems are voltage stabilizers, sun-seeker solar systems, turbine water control systems at the power station, AC converter, thermostats heater, Auto engines, recycling of computers, batteries, and aluminum cans (Electricalengineering.xy, 2021).

In a study for using an environmental waste management system, the EPA encourages proper waste recycling to reduce pollution, reduce energy use, reduce the volume of wastes, and conserve or reduce consumption of virgin materials (Larry, 2018). The study defines an open-loop system as a method of recycling materials for different use, and such a recycling process involves heat, chemicals, and crushing (Larry, 2018). Examples of the open-loop system are recycling plastic bottles to make fleece fabric jackets and organic wastes for fuel production (Larry, 2018).


The essay examines the t Theory of logistic packaging design and looks at the importance of packaging, its function, and benefits. It discusses four basic factors to consider during packaging: durability and security to the product, affordability of the material for packaging and ease of use, availability of the packaging material, and legal consideration. Examples of two methods of packaging material recycling including open-loop system and close up loop system. The differences in the methods are reuse properties or the nature of the virgin material. Close-up loop system recycled the waste to different users while the close-up system maintains the original use.


BluePrint. (2021). Explaining Closed-loop vs. open-loop recycling. Retrieved July 24, 2021, from

Electricalengineering.xy. (2021). Top 10 Examples of Closed Loop Control Systems [Practical Applications. Retrieved July 24, 2021, from www.electricalengineering.xy:

Larry, B. (2018). Open Loop Vs Closed Loop Recycling. Retrieved July 24, 2021, from

Malik, S. (2021). Packaging : Need, Objectives, Functions and Advantages. Retrieved July 24, 2021, from

Vahid, S. A. (2014). Design and Development of Packaging in Supply Chain Management: A Case Study. Retrieved July 24, 2021, from (2020). Fundamental Factors Considered When Chosing Packaging Material. Retrieved July 24, 2021, from

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