Alternative solution of domestic distribution for INTERSPORT AB

Abstract: INTERSPORT is one of Sweden’s largest sports retail companies, with 149 stores and a yearly turnover of 3240 MSEK (2004). During recent years the amount of goods that is distributed by the central warehouse (CW) in Taberg has increased significantly. As a result of this increase, several stores frequently have weekly deliveries that exceed the capacity of the store arrival area. Hence INTERSPORT AB wished to investigate the possibility of a changed distribution structure, which resulted in this thesis. It was found that heavy fluctuations of the distributed volumes occur, which requires high capacity at the CW. Unplanned deviations from ordinary deliveries are common at present, which aggravates the planning of activities in the CW and stores. The alternative solution that is formulated in this thesis limits the maximum order volume and increases the delivery frequency. As a result the flow from the CW to the stores was smother, due to the restricted delivery volymes. The lower degree of volume aggregation in the alternative solution also yielded an increased transportation cost. The major conclusion drawn in this thesis is that no concern is given to the order volume at the time of the order. To deal with the problem of large delivery volumes, information regarding order volume has to be compared with information regarding store capacity. After such a comparison has been made, appropriate measures can be taken.