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EVALUATION OF TRANSPORTATION PRACTICES IN THE CALIFORNIA CUT FLOWER INDUSTRY

EVALUATION OF TRANSPORTATION PRACTICES IN THE CALIFORNIA CUT FLOWER INDUSTRY. Selin Atalay. BACKGROUND. California’s share dropped from 64% to 20% In 2006, $316 million in cut flower industry = 77% of total US production Competition with South American growers increased

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EVALUATION OF TRANSPORTATION PRACTICES IN THE CALIFORNIA CUT FLOWER INDUSTRY

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  1. EVALUATION OF TRANSPORTATION PRACTICES IN THE CALIFORNIA CUT FLOWER INDUSTRY Selin Atalay

  2. BACKGROUND • California’s share dropped from 64% to 20% • In 2006, $316 million in cut flower industry = 77% of total US production • Competition with South American growers increased • South American growers use cross-docking and distribution center in Miami

  3. BACKGROUND • A single consolidation and pick up location for South American growers • Trucking delivery rates drop because of their huge volume • Californian growers ship individualy • Price is reflected on the customer

  4. BACKGROUND • California Cut Flower Commission (CCFC) wants to open a consolidation center in Oxnard • 36 growers in Oxnard, 12 in San Diego, and 22 inWatsonville • Aim is to drop transportation costs

  5. RELEVEANT LITERATURE • Two customer types - use third party carriers -employ their own transportation network • Considerations -Highly perishable product -limit on time it spends in transit and in inventory -How to ship? Full truckload rate, Less-than-truckload rate,courier services....

  6. DATA ANALYSIS

  7. DATA ANALYSIS

  8. DATA ANALYSIS • and 20108 • 7 producersprovided data forboth 2008 and 2010 • 4 producersprovided data foronly 2008

  9. METHODOLOGY • Twomodelsareconsidered -Baseline -Consolidation • Assumptions: -Simulation time is 365 days -maximumtrailervolume is 2600 cubicfeet - LTLandFTLratesareprovided

  10. METHODOLOGY

  11. METHODOLOGY

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