Wholesaler (Figure 2). Retail stores order products
automatically from a large wholesaler that orders
them from the contract manufacturer. It takes a week
to fill the order. The forecasts made by the wholesaler
are based on the sales of last year and the previous
month. The contract manufacturer supplies full
pallets of products about every three weeks to the
wholesaler’s distribution center, where the products
are checked before they are placed onto shelves.
All products are delivered through the distribution
center to the stores. The wholesaler maintains inventories
equal to about 3–4 weeks demand.
The aim of the wholesaler is to reduce inventory
through increased cross-docking. The contract
manufacturer would supply product pallets daily to
the wholesaler’s terminal, from where the products
would be delivered daily to big retailers. Direct deliveries
from the contract manufacturer to the stores
are also an option. Electronic transactions between