Volkswagen Warehousing Case Study

Volkswagen Warehousing Case Study

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Volkswagen Warehousing Case Study

Question 1

            Within the next five years, the Volkswagen company plans to increase its car sales by 10% year. To meet the growth, the company seeks to develop 12 new car models and twelve facelifts. The growth demands the enlargement of the company’s Toronto PDC warehouse to accommodate the vehicle parts related to the new models and facelifted vehicles. Regarding the required capacity, every new model will occupy 3000 new SKUs, while every facelift will occupy 1000 new SKUs.

Based on the analysis conducted above, the intended growth will demand an increase in warehousing capacity by 48000 SKUs. The Toronto warehouse does not have an adequate ability to accommodate the resources within the growth strategy. In particular, Toronto PDC only has an empty capacity of 20000 SKUs while develops a deficit of 28000 SKUs.

Question 2

To efficiently implement its growth strategy, the Volkswagen company should enlarge its warehousing capacity to accommodate the spare parts related to the new models, which will help serve the expected 17 new dealerships. Regarding the expansion strategy, the company should enlarge its existing warehouse since the move aligns with the demands related to the expansion. In relation, the development of the existing warehouse is the least costly among the three alternatives, which reduces the expenditure of the company. Furthermore, the expansion process will take place within 6-8 months, a time that is efficient for laying out the foundation of the growth expected in the next five years. The expansion will further enlarge the existing facility, which will help minimize the current Vin service delivery and ensure high-quality services.

Question 3

In a case where the sales of the company fall short of the projected sales, I would develop several measures to regulate the loss incurred by the company. Among the most appropriate contingencies include analysis of the company’s cash flow and the financial risk related to the low demand. Based on the acquired, I would develop management measures to ensure the company effectively manages the existing assets and works with the current cash flow to regulate losses to the company.  Similarly, I would adjust the company operations more so the production of new models and limit funding to growth projects. The move would help concentrate attention on the current crisis and maximize on the current market and brands. Lastly, I would initiate a discussion with various company stakeholders to inform the potential risk to the company upon which they will contribute to mitigating the impact to the company.