Replenishment is about sending goods from the central warehouse to retail store to replace goods that have been sold
Assumed capacity of our store is 100 m2 which can house 30,000 units of Finished Goods. What is the key impact towards your profitability when you compare sending 100 units in 50 trips as compare to sending 5000 units in one trip ?
Your answer
There is no difference in proftability
Sending 5000 units in one go will reduce profitability due to higher logistic cost per trip
Sending 100 units 50 times will improve profitability since we can be more flexible in our planning
Sending 100 units 50 times will be more wasteful due to the fixed cost per trip, hence reduce our profitability
Sending 100 units over 50 trips will reduce our store space, hence, improve profitability