Premium Essay

Dollar Tree Logistics

In: Business and Management

Submitted By wyx85
Words 504
Pages 3
In 2004, Dollar Tree Stores Inc. decided to address distribution center over-utilization and overcome its operational challenges. Coming off a great year for the company, Dollar Tree’s 19% compound annual growth rate proved that the company’s strategy was working. In order to deal with the company’s over-utilization of its Briar Creek, PA distribution center, Dollar Tree should build a new 600K-square foot distribution center in Hartford, CT.
This new distribution center should be built, instead of building a 400K-square foot expansion at the existing Briar Creek, PA facility, because the new facility is a more efficient use of capital investment in the long term. An analysis of specific costs the distribution center incurs support the decision to build the new plant. These costs include:
• Lower outbound transportation costs as the Hartford, CT center would be closer to a portion of the stores currently located in Briar Creek’s distribution territory, thus lowering the average distance from DC to store
• There is small advantage with regard to inbound costs as Hartford, CT is ~17 miles closer from the Port Authority of New York/New Jersey than Briar Creek, PA is, and thus there is a trucking cost advantage
The fixed cost of building the new Hartford, CT facility is $3,751,782 versus $1,425,805 for the Briar Creek, PA expansion, as shown in Exhibit 1. While the fixed cost for the Briar Creek facility expansion is almost half the cost of that incurred by the Hartford facility’s construction, this cost savings is minute when compared to the outbound costs that Dollar Tree would incur if the company did not expand its distribution center’s geographic reach. Additionally, these outbound transportation cost savings recur annually throughout the facility’s lifetime versus the one-time cost fixed cost saving. As shown in Exhibit 2, over the three-year projection the

Similar Documents

Premium Essay

Dollar Tree Logistics Case Study

...Dollar Tree Logistics XXXXX XXX XXXXXX MGMT XXX XXXXX XXXXXX XXX XXX XXXXX Dept. of Management XX, XXXX Dollar Tree Logistics Company Background Dollar Tree Stores, Inc. is the largest retailer among low-price convenient variety stores in the United States. Placing all of their merchandise at the one dollar or less price range, the company’s stores offers a wide variety of general goods, including food, housewares, health and beauty products, hardware, cleaning supplies, and many other consumer items. As of 2004, Dollar Tree had over 2,500 stores operating in 47 states. Because of its purchasing power – buying products in huge quantities, Dollar Tree is able to provide its customers a wide variety of products for just one dollar. It also obtains over 40 percent of its merchandise from imports, purchases over-runs from manufacturers, and maintains a strong focus on keeping costs low. Company History Dollar Tree, Inc. was founded in 1986 by Macon Brock Jr., H. Ray Compton, and Douglas Perry. The founders first worked together managing K&K Toys, Inc., a 136 store retailer. In 1986, the three man decided to expand and establish a new company. They launched and incorporated the new company as an extension of K&K Toys, in Virginia with the name of Only $1.00. The company began operating with five stores, three in Virginia, one Georgia, and one Tennessee, and it offered mostly closeout merchandise. While they continued to manage K&K toys, within the next...

Words: 2061 - Pages: 9

Free Essay

Online Business Expansion - Task 1

...Online business expansion E-Business Task 1 introduction Developing an online business expansion may be one of the biggest projects for business owners or shareholders to take part in the making. Looking around the big picture, E-Business can be the leading marketing enterprise around the world. One reason is because of its technology foundation. Nowadays, mostly everyone knows or has access to the internet, which makes it so easy to communicate. And what really creates an online business expansion is communication. It is the way an organization carries out its business information locally and across the globe. That is how to start developing the concept of an online business expansion. A1. - Viability of product or service A Family Dollar store near my community is having...

Words: 6506 - Pages: 27

Premium Essay

Dollarama Inc.

...Dollarama Inc. The Canadian Dollar Store Giant 1 Dollarama Inc. The Canadian Dollar Store Giant October 20th 2013 Dollarama Inc. The Canadian Dollar Store Giant 2 Abstract This paper will explore the strengths, weaknesses, opportunities and threats (SWOT) of the internal and external factors that contribute to the success and potential failure of Dollarama Inc. The different factors we will look into include competition, technology, ethics, globalization and environment. Dollarama Inc.’s mission is to provide value for the customer and to surpass the customers’ expectations; “Dollarama’s success is a demonstration of the type of retailing innovation that can drive brand growth”. (Brand Finance, 2013). As you read, you will discover that there are many opportunities for Dollarama to increase its business, even if it is the biggest and most successful dollar store chain in Canada. Dollarama Inc. The Canadian Dollar Store Giant Dollarama Inc. The Canadian Dollar Store Giant 3 Dollarama was founded in 1992 by Larry Rossy. It it’s the leading dollar store chain with over 800 locations throughout Canada. Their business strategy is to provide customers products that are of good quality and value and in convenient locations. Contrary to popular belief, the customer base that shops at Dollarama ranges from the richer populations to the poorer populations. Having a great deal of pressure on profit margins, in 2012, Dollarama rolled out new price points, prices...

Words: 1484 - Pages: 6

Premium Essay

Business

...with being a public company. Being a public company allows other people to fund your idea while getting the benefits. The company I chose to write about is Dollar Tree. The main business and operational activities are to offer merchandise to customers at a lower price with the same quality as the major stores. The purpose of this paper is to identify the development of the Dollar Tree and the financial state the company is in. I will discuss a short outline of the main developments of the company over the past few years. In 1986, Dollar Tree was founded by three men who knew went into the toy store business. Eventually they sold that store and focused totally on the discount market. The store began as a discount store Only One Dollar Inc. In 1993, the store changed the name to Dollar Tree Stores Inc. which remains the same today. This company is the leading discount variety store in the United States. Dollar Tree sales merchandise such as food, toys, cleaning supplies, health and beauty supplies, books, and many other consumer items for only one dollar. They are able to offer a variety of products at one dollar because the company buys products in huge quantities. Some financial information such as the stock price, and its profitability, and other financial information I found relevant is that Dollar Tree is listed as one of the Fortune 500. The rank they currently hold is 373. At the end of 2011, their assets were over $1.326 billion according to ycharts.com...

Words: 338 - Pages: 2

Premium Essay

Dollar Tree Analysis

...Dollar Tree Analysis Name: Date: Analyze the business-level strategies The sluggish economy has created a perfect storm in favor of the retail business. Dollar Tree, Wal-Mart, and Dollar General have generated significant profits as a result of the sluggish economy. These firms have embraced the financial opportunity amid consumer pessimism. This evaluation will disgust the business level-strategy practiced by Dollar Tree. We will discuss its strength, weakness, opportunity, and threats. The organization strength has made it possible to respond to realistic opportunities. The firm’s decision makers thrive to increase profit. Consequently, their proven ingenuity has shaped the strategic business model. In short, Dollar Tree has the ability to sustain long-term growth, and sufficient cash to invest in new ventures. As a result, company’s estimates have significantly increased. Organizations can maintain a competitive advantage only if they can provide their customers competitive products at low prices (Hitt, Ireland, & Hoskisson, 2013). Dollar Tree offers consumers this service, more value for 1$, no other competitor has been able to match this strategy. Dollar Tree operates as a discount variety store selling products at a uniform price of $1 or less. Dollar Tree operates 4,842 stores nationwide and 5 Canadian Providence (Dollar Tree, 2013). Moreover...

Words: 1402 - Pages: 6

Premium Essay

Case Strat Pol and Form

...Dollar Tree is the nation’s largest single price point retail with over 3300 stores across the United States. It has faced several issues that have led to organizational and leadership problems. 1. What are the chief elements of the strategy that “Dollar Tree” is pursuing? The chief elements important in this article are all related to the fact that the company was moving towards expanding the business and creating a competitive advantage. As the article says, the business grows so much that by 2009, there were over 33000 retail stores and 12 distribution centers. The chief elements are as follow: - To enter new geographic markets. - To gain sales and market share with lower costs. - Adhering to policies and procedures and making changes when needed. 2. What are the elements of “Dollar Tree” ’s Business Model? There are 2 elements in the Business Model of Dollar Tree, which are Customer Proposition Value and Profit Formula. Customer Proposition value lays out how the company is going to satisfy customer needs at a price the customer will consider a good value. In the case of Dollar Tree’s company one dollar for all products they offer is both a good value for the price they pay, and satisfying. Profit Formula describes how the company is going to determine a cost structure that will provide profits. Dollar Tree company, in order to keep up with competition, has to purchase very aggressively when products of extreme value come their way, even if it means overloading...

Words: 1551 - Pages: 7

Premium Essay

Case Study for Family Dollar Stores

...Statement – provides a description of what Family Dollar seeks to accomplish on a day-to-day basis and sets the standard for quantitative performance measures. • External Factor Evaluation (EFE) Matrix – outlines the opportunities and threats that could affect the company and rates Family Dollar’s current performance in addressing those factors. • Competitive Profile Matrix – outlines the success factors that are critical to the company’s continuity and rates Family Dollar’s performance as well as its rivals’ performances in addressing those factors. CASE STUDY FOR FAMILY DOLLAR STORES MISSION STATEMENT Existing Mission Statement To be a compelling place to shop for our customers; To be a compelling place to work for our team members; To be a compelling place to invest for our shareholders. Revised Mission Statement Family Dollar’s mission is to provide convenience and low prices for our customers (1), exceptional opportunities and incentives for our associates (9), and outstanding returns for our investors (5). Through our strategy of nationwide expansion (3), technological innovation in our logistics network (4), and energy reduction initiatives in our stores (8), we will generate industry-leading profits (7) and fortify our commitment to serve neighborhoods (6) with high-quality retail items (2) at a great value. EXTERNAL FACTOR EVALUATION (EFE) MATRIX |EXTERNAL FACTOR EVALUATION (EFE) MATRIX FOR FAMILY DOLLAR ...

Words: 816 - Pages: 4

Free Essay

Wal-Mart 2011

...what the competitors offer) to satisfy customer needs, maximise revenues for shareholders and innovate and diversify ahead of the competition. Stalk, Evans & Shulman (1992: 57) maintain that Wal-Mart epitomises “capabilities-based competition”. Competencies are the collective learning, technologies and culture in an organisation which arise through the integration of diverse production skills, harmonisation of technologies, and open communication and commitment across organisational boundaries. Core competencies enable access to wide variety of markets, add customer value, and are difficult to imitate and thus constitute a source of competitive advantage (Prahalad & Hamel, 1990). Wal-Mart’s competitive advantages include: • Sophisticated logistics system – Wal-Mart’s internal capabilities in inventory management and distribution have played a key role in maintaining its ability to continuously deliver on its CVP of ensuring the maximum availability and accessibility of goods, being trustworthy, and ensuring ‘everyday low prices’. Supply chain management is driven by the practice of ‘cross-docking’, which eliminates inventory holding, minimises stock-outs and permits more accurate and stable pricing. Strategic investments in various interlocking support systems (IT, satellite communications system) ensure all participants in the supply chain are connected and in constant communication with each other. These capabilities...

Words: 1524 - Pages: 7

Premium Essay

Thuong

...power from reader – Range a few meters • Little memory – Static 64-to-128-bit identifier in current ultra-cheap generation (five cents / unit) – Hundreds of bits soon • Little computational power – A few thousand gates – No cryptographic functions available – Static keys for read/write permission The grand vision: RFID as next-generation barcode Barcode RFID tag Fast, automated scanning Line-of-sight Specifies object type Radio contact Uniquely specifies object Provides pointer to database entry for every object Commercial applications • Smoother inventory tracking – Military supply logistics • Gulf War I: Placement of double orders to ensure arrival • Gulf War II: RFID renders supply chain much more reliable • Product recalls • Anti-counterfeiting • Maintaining shelf stocks in retail environments – Gillette Mach3 razor blades • Parenting logistics – Water park uses RFID bracelets to track children There is an impending explosion in RFID-tag use • Wal-Mart requiring top 100 suppliers to deploy RFID at pallet level by 2005 • Gillette announced order of 500,000,000 RFID tags • Auto-ID Center at MIT – – – – Wal-Mart, Gillette, Procter & Gamble, etc. Spearheading EPC (electronic product code) data standard for tags Developing cheap manufacturing techniques...

Words: 1064 - Pages: 5

Premium Essay

Financial Analysis

...Dollar General MBA 7000 Business Policy and Strategy March 14, 2012 Indiana Tech Introduction and Overview Dollar General’s CEO, Cal Turner Jr., said, “Our customer doesn’t buy until she absolutely has to – she’s that stretched. Our agenda has to be to do everything we possibly can to be responsive to her needs. This is why Dollar General’s executive vice president for operations and merchandising, described the company’s customers as: “Our customers are salt-of-the-earth people who are savvy about spending money because they have to be. They have to balance their checkbooks every day, at least mentally.” (Appendix 2) So to me that displays why Dollar General has flourished during these past years even during the economic challenges in United States, Dollar General understands the target customers they are looking to attract. Therefore, internally the company must meet government regulations of health care coverage to meet upcoming government standards and expansion of the company globally while being consistent and not straying off its aggressive business growth plan in the United States can increase the company’s share of the market not just locally but globally, while increasing the company sales and awareness thereby increasing its position even more so in the industry. Dollar General serves the mid to lower income households with annual incomes of less than $50,000. (Case) Dollar General has the largest appeal to large families, low income, fixed...

Words: 11820 - Pages: 48

Premium Essay

Modelling Credit Risks

................................................................................................. 6 5. Descriptive Statistics of Data ......................................................................................... 11 6. Model Selection............................................................................................................. 12 7. What is a Regression Model? ......................................................................................... 13 8. Logistic Regression Model - Stepwise............................................................................. 14 9. Chosen Models .............................................................................................................. 15 10. Analyzing Stepwise Regression Model: ....................................................................... 16 11. Neural Network .......................................................................................................... 20 12. Decision Tree .............................................................................................................. 22 13. Model Diagram...

Words: 3333 - Pages: 14

Premium Essay

Oresund Bridge Project 1

...Course project 1 contains my responses to the nine questions related to the Oresund Bridge project. I have answered them to the best of my ability. 1. What process would you use for identifying project risks for a second Oresund Bridge project? What risks would you raise for each alternative? For such an extremely large project like this to identify project risks, I would start with the basic premise of a conducting a SWOT analysis which allows for identifying Strengths, Weaknesses, Opportunities, and Threats. Once SWOT analysis is completed, I would move forward to defining control of the project to indicate the following variances such as cost, schedule, scope and quality. Furthermore, bring in Subject Matter Experts (SME) to provide their input for mitigation strategy. Lastly, other risks to be raised for each alternative is to develop a risk management plan, project planning outputs, risk categories, historical information. By using these deliverables under the PMBOK risk processes called Risk identification. 2. What process would you use for categorizing project risks for a second Oresund Bridge project? How would you actually categorize them? I would use the qualitative risk analysis process for categorizing project risks because from a high level standpoint it allows me to evaluate each risk and designate the severity of the impact of the project and estimate the probability of the risk occurring in terms of high, medium and low. For categorizing project risks...

Words: 1038 - Pages: 5

Premium Essay

Three Internet Titians

...dominates the Internet search. Microsoft offering Bing has grown to about fifteen percent of the search market, and the rest basically belongs to Google. Then we bring in Apple who dominates as the leader in mobile software applications. Apple has several advantages in the battle for mobile supremacy. The IMac, iPod, iPad and the iPhone have all contributed to Apples huge success which was totaled well over sixty five billion dollars in 2010. Apple already offers approximately 500,000 applications for their devices and apple takes a thirty percent cut of all app sales. Google is acting quickly to enter the battle for mobile supremacy while they still can. Apple is reliant on sales of its devices to remain profitable. So far this has yet to be a problem, but now Apple has to contend with Google spreading its advertising networks onto these devices to make a profit. Not to mention Google also provides Android at no cost to smart phone manufactures, as well as making its biggest purchase in August 2011, buying Motorola Mobility Holdings for 12.5 billion dollars. Giving Google 17,000...

Words: 1027 - Pages: 5

Premium Essay

Dollar

...OM 367: Strategic Supply Chain Management Professor Stephen M. Gilbert Classroom: CBA 4.348 Class Meeting Time: TTH 12:30-2:00 Office: CBA 3.424 Phone: 471-9456 (O) e-mail: steve.gilbert@mccombs.utexas.edu Mail Box: Dept. of IROM, CBA 5.202 Fax: 471-3937 (O) Office Hrs: T-TH 10:30-11:30, and by appt. COURSE DESCRIPTION Supply Chain Management involves the flows of materials and information among all of the firms that contribute value to a product, from the source of raw materials to end customers. We will integrate issues from marketing (channels of distribution), logistics, and operations management to develop a broad understanding of a supply chain. By taking a strategic perspective, we will focus on relatively long term decisions involving the investment in productive resources, configuration of processes, product designs, and development of parterships with suppliers and channels of distribution. Although the development of analytical tools is not one of the primary objectives of the course, students should be comfortable with quantitative analysis. By the end of the course, you should have developed an appreciation for the major strategic issues trade-offs in supply chain management as well as the ability to use conceptual frameworks to make decisions. TEACHING/LEARNING METHODOLOGY The detailed course outline starting on page 6 lists, for every class session, the reading(s), case(s), assignment(s), and anything else of importance. Please read this outline carefully...

Words: 3965 - Pages: 16

Premium Essay

Walmart

...Executive Summary Walmart is the world’s biggest private employer with more than 2.2 million employees working in more than 8500 stores in 15 countries under 55 different names. It is world’s third largest public corporation and one of the world’s most valuable companies. Walmart has a tremendous product line which includes general merchandise, apparel, toys, domestics, grocery, fabrics & notions, stationery & books, cellular phones & service plan contracts, shoes, housewares, hardware, electronics, home furnishings, small appliances, automotive accessories, horticulture & accessories, sporting goods, pet food & pet accessories, and financial services & products. Walmart is trading around $74 per share now. I would recommend that the stock can be hold at this price but should not be bought. This is mainly because if we see the last five year chart of Walmart, it has been rising since mid-2011 and is now not much lower than its high of about $79 per share. Taking into account the bleak economy at present, it might not be a good buy. On the other hand, the fundamentals of the company are quite strong and its profitability has increased in recent times. So it might get back to the $80-$85 mark. The negative thing about this stock is the lawsuit that was filed against Walmart about discriminating against Women employees. Though most of the cases have been concluded in favor of the Walmart but a few cases are still pending which might be a liability for Walmart in the future...

Words: 1009 - Pages: 5