Merloni Elettrodomestici SpA: The Transit Point Experiment

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Case

Reference no. 9-690-003

Subject category: Production and Operations Management

Authors: Janice H Hammond (Harvard Business School); Michelle Kelly (Kingston University)

Published by: Harvard Business Publishing

Originally published in: 2001

Version: 7 August 2001

Length: 19 pages

Data source: Field research

Topics: Competitive advantage; Customer relationship management; Customer service; Distribution; Facilities planning; Information technology; Inventory management; Logistics; Marketing channels; Time management; IT management; Facilities

Share a link: https://casecent.re/p/46936

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Abstract

Merloni Elettrodomestici is a leading Italian manufacturer of domestic appliances. In 1986, an exposition for Merloni customers is scheduled at its Milano regional warehouse. During the two-month period preceding the event, when the warehouse must be free of inventory, the company conducts a 'transit point' experiment. Each day, a truckload of products from the company's central warehouse is sent to Milano, where it is immediately transferred to small trucks for local delivery. At the conclusion of the experiment, the company is considering the replacement of its 17 regional warehouses with transit points. Students are asked to evaluate this proposal and recommend a configuration for Merloni's distribution network. Issues to be considered in the analysis of the case include the impact of different network configurations on customer service and on inventory, labor, operating, and transport costs.

Location:

Italy

Industries:

Appliances; Housewares

Size:

USD300 million sales

Other setting(s):

1986