Modeling a Conversion of Suppliers from Prepaid to Collect System – UA10-SAMS

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Modeling a Conversion of Suppliers from Prepaid to Collect System – UA10-SAMS

Motivated by the conversion of many suppliers from prepaid to collect shipping terms, this project identifies opportunities to leverage synnergy between collect suppliers. In particular, we outline a methodology to synchronize vendors in the same geographic areas so they can flow through consolidation centers, and a methodology to pool vendors to save on transportation costs.

Sponsor:

Sam’s Club

Research Team:

Sarah Root

Universities Involved:

University of Arkansas

Start Date:

05/15/10

End Date:

08/14/11

Summary:

Problem in context:

Sam’s is looking to move more of its suppliers from prepaid to collect.

Identify opportunities to reduce costs by moving to collect terms

The quantitative tradeoff between different level of service (4- day window, 5-day window ) and the cost is unknown.