Based on the available information, is Atlanta the best location for a distribution center to serve the southeastern region? If not, what would you recommend?

Darlene Maney

Kaplan University


Based on the available information, is Atlanta the best location for a distribution center to serve the southeastern region? If not, what would you recommend?

Based on the available information, I would recommend the Atlanta distribution center remain in place. In analyzing the grid coordinates of the horizontal and vertical values, Atlanta’s coordinates of 1400 horizontal and 600 vertical are the closest to the least cost location points of 1533 and 638 respectively. The limitations of this decision are that “the solution is optimum for only one point in time.” (Coyle, 2009) Other factors to be considered would be changes in volumes that company experiences, whether or not there are changes in transportation rates, raw material sources, or even the market locations. The grid is also based on transportation costs remaining the same, which does not happen because there are various factors that affect those rates. As a matter of fact, if one but examines the grid, one will see that Atlanta is the nearest city to the least cost location. Again, this is utilizing a grid technique analysis which provides a good starting point, but there are other factors that must be considered when making the final decision: projected future of the industry, transportation rates, transit privileges, foreign trade zones, commercial zones, and tapering rates. Please view the attached spreadsheet for grid information and computations.

As for Atlanta as a choice, it is already the distribution site for many local, regional, national, and global companies. According to the Atlanta Metro Chamber of Commerce, “The metro Atlanta area offers unmatched market access to destinations around the United States and the world. Atlanta has become a distribution hub with its highly developed infrastructure, consisting of the airport, railroads, highways and ports.” (“Market Access”, 2009) Should the company decide to expand to global markets, Atlanta is located just a few hours from Savannah, which is the fourth largest container port in the United States. Products can be shipped by truck to 80% of the United States in just two days. Atlanta has often been described as one of the largest inland ports in the world. According to Michael Porter of the Harvard Business School, “90 percent of the largest 3PLs in the world run distribution operations out of the Atlanta area. Well over 100,000 people in the Atlanta area are involved in the logistics industry.” (Foster, 2005)

With the infrastructure already in place and by being the least cost center of the grid, I feel that keeping the distribution center in Atlanta would be a reasonable decision.

Foster, Thomas A. (2005), “Where in the World? The Best Locations for Supply-chain Management Facilities”, retrieved July 4, 2011 from: http://www.logisticsatlanta.com/news_detail.asp?NewsListingsID=13