Merloni Essay

1421 Words6 Pages
Distribution network and the effect of different network configurations on costs items, such as transportation, operating and inventory costs as well as customer reach and service has been of utmost importance for the Merloni Company with respect to the size and the scope of its operations. This case study will address this issue and evaluate an alternative distribution network for Merloni Elettrodomestici, a subsidiary of the Merloni Company, as opposed to its current distribution system with regards to the costs that each distribution network generates. Before analyzing the costs, looking at the company history and briefly touching upon the operation details would be helpful in understanding the distribution network better. The Merloni Company (Industrie Merloni) was founded in 1930 with a single plant near Fabriano (in central Italy). Initially, it was only producing weighing instruments. In the 1950s, it diversified its product line to include gas cylinders, electric water heaters and eventually gas stoves. In order to produce gas stoves, the company opened a second factory, which represents its transition to domestic appliances. In the following decades, Merloni established its position in the market in high quality domestic appliances. It created the brand name Ariston for its products and diversified further its product line to include bath and more kitchen appliances. In 1975, the company divisionalized into three separate subsidiaries by product line. One of these subsidiaries under the Merloni Group was Merloni Elettrodomestici. It became known as a domestic appliances company that manufactures both free-standing and built-in stoves, refrigerators, freezers, dishwashers and washing machines. With its operations, it is the largest of the Merloni Group subsidiaries and merits attention in regards to its operations, consisting of five plants in Italy and

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