Transport and Inventory Management
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Transport and Inventory Management


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Topic 1: 1200 words

Transport: there is a growing demand to increase resource utilisation and intermodality/multimodality during transport phases in ways which challenge established transport strategies. Choose a company to, identify and explain its intermodal/multimodal transportation choice; examine how this company can increase the intermodality/multimodality in its supply chains, for some or all of its product categories; and critically evaluate the advantages and disadvantages of the new intermodal/multimodal transportation choice.

  1. Use diagrams and/or flow charts to illustrate the product movement and underpin the supply chain network.
  2. Identify and explain its intermodal or multimodal transportation choice
  3. How to increase the intermodality or multimodality in its supply chains (issues and solutions)
  4. Critically evaluate the advantages and disadvantages of the new intermodal or multimodal transportation choice.
  5. Examples from the literature sources, especially recent articles from high impact journals. Integration of theory and practice.

Topic 2: 1200 words.

Warehouses: whether they are classed as national distribution centres, regional distribution centres, warehouses or hubs, perform a variety of different roles. Strategic and operational factors impact upon the effectiveness and efficiency of warehouse operations throughout the supply chain. Select a company of your own choice and examine how this company manages its warehouses and propose different/better order picking principles to suit the company's strategic and operational factors. You are also required to critically evaluate how the different/better order picking principles could be influenced by product inventory types, utilisation of space, stock movement, technology and the location of picking areas.

  1. Use diagrams and/or flow charts to illustrate the warehouse floor plans and product movement within the warehouse.
  2. Describe and examine the warehouse management (e.g., type of warehouse, warehouse size, use of technology, types of the inventory to be stored, etc.)
  3. Critically evaluate how the proposed order picking principles link to the (1) inventory types, (2) utilisation of space, (3) stock movement, (4) technology and (5) the location of picking areas.
  4. Examples from the literature sources, especially recent articles from high impact journals. Integration of theory and practice.


With the current focus on value, companies have begun to utilise their supply chain as a competitive advantage tool to overcome macroeconomic and competitive challenges. For manufacturers and retailers, freight transport has become a critical and dynamic aspect of the supply chain due to its ever-changing nature. Transportation has become a key element supporting the movement of commodities across their supply chains. However, the need for seamless operations, inefficiencies, fluctuating costs and complexities related to shipments and goods delivery have a direct impact on organisational profitability. In the present business environment, customers focus on the products to reach them within the expected time rather than the mode of delivering its products. For the survival of international companies in the complex market, transportation and warehouse are to be competent. This report assesses the transportation and warehouse management practices of IKEA, a leading global furniture retailer with a specific focus on its Singapore operations.


IKEA is one of the leading global players to adopt transportation as a competitive strategy. It adopts efficient sourcing, which is a key part of its supply chain strategy. IKEA succeeds through the effective organisation of shipments through collaboration with suppliers. Because of the cost leadership strategy, IKEA requires efficient transportation and distribution logistics to reduce the cost. IKEA adopts intermodal transportation with the use of road, railways, air and ships. Its existing practices of distribution offer the company speed, dependability and flexibility due to the flat packaging customers' self-delivery.

IKEA's business functions, including supply chain and inventory management, operate in coordination to ensure its organisational value proposition. It differentiates from competitors by stocking a catalogue of products around a year at a guaranteed price. It adopts a think global, act local warehousing strategy by interlinking a global supply chain with local distribution centres. This report determines the current transportation and warehouse practices of IKEA. Based on the assessment, the best practice suggestions are made. It is suggested that IKEA increases the use of rail transport to compensate for the use of truck freight to reach its sustainability goals.

Topic 1

A. Company Background

Founded by Ingvar Kamprad in Sweden, over the last seven decades, IKEA Group, owned by Stichting INGKA Foundation, has become a leading and largest furniture and home appliances manufacturer and retailer in the world (IKEA, 2017). Its business inspiration is to offer a wide range of products to a maximum number of customers at affordable prices. According to the company, it follows the optimisation of its value chain, strong supplier relationships, investments in automated production and a huge volume of goods to provide good quality products for its customers at reasonable rates (Stadtler, 2007).

The inbound logistics for IKEA involves the procurement of raw materials from over 1000 suppliers located in 51 countries across the globe. It maintains relationships with suppliers through trading offices located in more than 40 countries. IKEA stores are bigger in size with the display of its over 9,500 product ranges (IKEA Group, 2015). It is estimated around 20%-25% of its employees in each store handle logistics alone. In IKEA stores, customers are responsible for transportation costs for the products purchased, with the stores offering both parcel and truck delivery.

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