Reduced Shipping Cost Analysis
Model potential shipping cost savings from opening an additional distribution center/Client
Snack Magic
New York City, New York
The client is interested in opening an additional distribution center that would serve alongside their existing center in New York City. One of the leading expenses of having just one distribution center is the cost of shipping to customers, and opening an additional distribution center could significantly reduce this cost. Tessellations reviewed the current sales data of all packages shipped, considering package weight, actual cost of shipping, and the shipping carrier used. Using published shipping costs of each of the main carriers (UPS, FedEx, and USPS), along with each carrier’s defined shipping zones, the estimated cost of shipping could be modeled based on opening an additional distribution center, along with total shipping costs savings.
Services Provided:
Analyzed current sales data
Mapped and identified sales hotspots
Researched costs associated with shipping carriers
Developed FME process to model reduced shipping costs
Solutions
Solutions
- Reviewed and mapped all sales data within the contiguous United States.
- Completed a hot spot analysis to identify potential regions for placing an additional distribution center.
- Researched shipping cost models to be included in modeling the prospect of opening an additional distribution center.
- Used published shipping cost data from each of the main shipping carriers to accurately model the cost of shipping from different locations.
- Developed a solution in FME to quickly analyze the estimated cost of shipping based on the opening of a new distribution center in different locations.
Note