The Advantages and Disadvantages of Owning a Delivery Truck Business

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. American InterContinental University Contracts & Procurement MGMT475-1501A-01/ The Advantages And Disadvantages Of Owning A Delivery Truck Business 2IP Chyrel Wohlgemuth February 22, 2015 Abstract One of the main purposes of a procurement manager is to evaluate suppliers, negotiate contracts, and review product quality. It also includes studying the market to identify any price trends and future availability of materials and goods; locating vendors; negotiating prices; preparing requisitions and purchase orders; and maintaining purchase records. So, when the owner of the largest supplier of home goods in the Northeast wants know if it would be better to purchase trucks for the purposes of shipping their products instead of giving the responsibility to a third party trucking company, the procurement manager will do the research and present it. This paper will detail the pros and cons of owning a fleet of trucks. Introduction There are four options available for the purpose of moving merchandise from warehouse to customers’ locations. Ninety-nine percent of shippers use three of the most common options. These popular categories are ownership (including leasing or renting), outsourcing (a third-party logistics provider, 3PL or broker), and or a combination of using trucking companies, brokers, and having a private fleet. “Companies like Wal-Mart, Target, Kroger, all of the retail giants, and a host of name brand distributors use the fourth option, dedicated contract carriage as a way to reduce costs, increase truck capacity, and transfer liability and headaches.” (Interstate Transport, 2011) As a procurement manager it is important to ensure that the most cost efficient and profit options are available and used. As a retailer, how do you decide between in-house or outsourcing for shipping and delivery of home goods merchandise? The

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