Notice that this case scenario is the same as the previous question. But, just in case, I would like to repeat the same scenario.

CARRIER OPTIONS: The Modern Housewares, Inc. (MHI) is a major manufacturer and distributor of household products ranging from food processers, microwave ovens, and refrigerators to toasters and can openers. Recently, MHI consolidated all production at an abandoned automobile assembly plant in Maumee, Ohio that it acquired at a cheap price. From this centralized production facility, a number of regional distribution centers located in Chicago, Philadelphia, Louisville, Atlanta, Toledo, Reno, Toronto, and Los Angeles serves the entire North American market. MHI utilizes rail transportation almost exclusively to move raw materials into its production plant in Maumee, Ohio. Over the years, it has negotiated favorable contracts with the railroads that serve inbound transportation. Occasionally trucks are used to move raw materials, but only on an emergency basis. MHI has made a sizable investment in rail facilities-spur tracks, sidings, and docks - to facilitate handling of rail cars. Given the investment in rail facilities, MHI also has begun to use railroads for some outbound movements of its finished products from the manufacturing plant to its regional distribution centers all across the United States. Finally, motor common carriers are used to ship its products from the regional distribution centers to its customers such as Best-Buy, Wal-Mart, K-Mart, and Target.

TRANSPORTATION NETWORK DESIGN: MHIs logistics department devised the current transportation network at the time the manufacturing plant was consolidated about two years ago. Mitch Manning, MHIs logistics manager, prefers common carriers over other carrier options and has made it a policy to use only common carriers, regardless of constant freight rate raises and increasing fuel surcharges. However, Mitch noticed that some of the common carriers are often erratic in meeting delivery deadlines and their overall service quality is declining. Mitch may need to revisit his companys traditional policy of using common carriers only to reduce transportation costs and improve transportation services. During the past two years, MHI has experienced a considerable increase in competition (especially from foreign manufacturers), which has resulted in falling prices, declining market share, and shrinking profits. In addition, a lack of consumer confidence resultant from the stagnant U.S. economy has aggravated the household product market for the last two years. This trend led to higher inventory levels at the regional distribution centers. Given the short product life cycles of the household products, excess inventory may force MHI to write off a significant amount of obsolete inventories and eventually declare Chapter 11 bankruptcy proceedings. In this crisis, Mitch is open to any kind of transportation alternatives including contract carriers or other modal options that he can pursue to keep his companys transportation cost low and to reduce the lead-time. In particular, the failure to shorten the MHIs current lead-time of five days has become a growing concern among the company executives, because a lengthy lead-time requires additional inventory and deteriorates customer services. In fact, some of the MHIs key customers such as Wal-Mart threatened to switch to other suppliers, unless MHI can cut its lead-time down to two days that its competitors are providing. To summarize, Mitchs task is to come up with a viable transportation strategy to re-evaluate current transportation practices/policy, to study all possible transportation/inventory alternatives, and to make recommendations that will improve MHIs transportation practices.

• Which of the following will NOT be a viable solution for the numerous problems facing the Modern Housewares, Inc.?

Group of answer choices

Use piggybacks

Use freight forwarders

Relocate a distribution center near Memphis to use FedEx

None of the above