Best Furniture Corporation (BFC) is a global furniture retailer BFC sells standardized furniture and related accessories at retail stores in North America Europe and Asia BFC s vision is to create a better life for everyone by offering a wide range of well designed, functional home furnishing products at affordable prices BFC sells 20,000 home furnishing products, around one quarter of which are renewed each year Currently, BFC develops the product range based on life at home, in particular the needs of a large number of people with limited incomes and limited living space Keeping prices low takes a concentrated effort at every stage of production and sales BFC is persistent in finding ways to use the economies of scale, better production methods and smart design to keep costs low without affecting the quality of BFC products BFC has 2 distribution centers (DCs) in Hong Kong and Korea Each DC has an annual handling capacity of 10 million units These DCs supply wood based furniture from BFC's suppliers in Malaysia and New Zealand to its stores, and they ensure that the route from suppliers to customers is as direct, cost effective and environmentally friendly as possible BFC has collected the following relevant data of its distribution process in Asia market Transportation cost per unit Market demand Hong Kong Korea North Asia 150 90 8,000,000 Southeast Asia 200 300 4,000,000 South Asia 300 400 2,000,000 Supplier Location Production cost ($ unit) Transportation cost per unit Annual production capacity (in unit) Hong Kong DC Korea DC Malaysia 200 100 150 7,000,000 New Zealand 280 120 200 8,000,000 Recently the top management of BFC has come up with a strategic business development plan The major strategy in the plan is to manufacture and sell highquality premium furniture Having witnessed a substantial rise in living standards in Asian countries, the BFCs top management has planned to set up a new company Premium Furniture (PF) to produce a wide variety of premium furniture in China for affluent customers in Asia, ranging from the reproduction of fine Western antique furniture to contemporary furniture design The manufacturing of such furniture requires a dedicated team of craftsmen with superb craftsmanship Question Discuss the order winners of BFCs standardized products and PFs premium furniture And identify appropriate performance indicators for the logistics network distributing BFCs standardized products and PF s premium products Should PF use the existing BFC's network to distribute its furniture Why

Name: Best Furniture Corporation (BFC) is a global furniture retailer. BFC sells standardized
Brand: SolutionInn
Rating: 3.44 (151 reviews)

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Dec 07, 2020

Best Furniture Corporation (BFC) is a global furniture retailer. BFC sells standardized furniture and related accessories at retail stores in North America. Europe and Asia.

Best Furniture Corporation (BFC) is a global furniture retailer. BFC sells standardized furniture and related accessories at retail stores in North America. Europe and Asia. BFC^’s vision is to create a better life for everyone by offering a wide range of well-designed, functional home furnishing products at affordable prices. BFC sells 20,000 home furnishing products, around one quarter of which are renewed each year. Currently, BFC develops the product range based on life at home, in particular the needs of a large number of people with limited incomes and limited living space.

Keeping prices low takes a concentrated effort at every stage of production and sales. BFC is persistent in finding ways to use the economies of scale, better production methods and smart design to keep costs low without affecting the quality of BFC products.

BFC has 2 distribution centers (DCs) in Hong Kong and Korea. Each DC has an annual handling capacity of 10 million units. These DCs supply wood-based furniture from BFC's suppliers in Malaysia and New Zealand to its stores, and they ensure that the route from suppliers to customers is as direct, cost-effective and environmentally friendly as possible.

BFC has collected the following relevant data of its distribution process in Asia.

market	Transportation cost per unit		Market demand
market	Hong Kong	Korea	Market demand
North Asia	150	90	8,000,000
Southeast Asia	200	300	4,000,000
South Asia	300	400	2,000,000

Supplier Location	Production cost ($/unit)	Transportation cost per unit		Annual production capacity (in unit)
Supplier Location	Production cost ($/unit)	Hong Kong DC	Korea DC	Annual production capacity (in unit)
Malaysia	200	100	150	7,000,000
New Zealand	280	120	200	8,000,000

Recently. the top management of BFC has come up with a strategic business development plan. The major strategy in the plan is to manufacture and sell high—quality premium furniture. Having witnessed a substantial rise in living standards in Asian countries, the BFC’s top management has planned to set up a new company Premium Furniture (PF) to produce a wide variety of premium furniture in China for affluent customers in Asia, ranging from the reproduction of fine Western antique furniture to contemporary furniture design. The manufacturing of such furniture requires a dedicated team of craftsmen with superb craftsmanship.

Question: Discuss the order winners of BFC’s standardized products and PF’s premium furniture. And identify appropriate performance indicators for the logistics network distributing BFC’s standardized products and PF s premium products. Should PF use the existing BFC's network to distribute its furniture? Why?