The demand and requirement for dairy products in the UAE have always been very high since some of the dairy products such as milk, eggs, cheese, etc. are consumed on a daily basis within many households all around the world. According to Gulf News, some of the dairy products such as milk are considered very healthy for consumption and should always be a part of our diet plans. This is because the benefit of having milk in our diet plans will help us stay fit and also lead a healthy lifestyle while staying in a fast-paced city like Dubai. Thus, seeing the huge demand for milk in the Middle East, we plan on setting up an e-business which will sell skim milk products through the use of the Noon Application and retail outlets so that we can reach a wide range of consumers as we intent on serving the regional market within the UAE. For our e-business we will have suppliers and third parties to provide us with skim milk that can be delivered to consumers within 0 to 3 days.
“Our intention behind selling skim milk products is to provide consumers with quality milk product and help promote a much healthier lifestyle for the UAE citizens as the consumption of skim milk is very nutritious for humans due to its low-fat content and high Vitamin D.”
Our mission tagline clearly identifies with our e-business focused on assuring that our customers that they receive essential quality milk and to encourage them to purchase and consume skim milk due to its enrichment in Vitamin D and its low fat content.
The two questions that are to be answered below with context provided above and also research:
• Identify the different factors that you are going to consider when choosing facility locations (ex: Warehouses). Use the Factor weighting method, to show how you chose your locations.
• Decide on a proper (cost effective) distribution and transportation business model and illustrate. Discuss your choice (why this model). The distribution model is basically where would you set up the retail outlets for selling the skim milk products and then you have to name factors on the basis of which you choose this location like for example it’s in the downtown area as there is more demand there, easy access to customers like this. Specifically, distribution model is which channel are we using to sell the products, for our project it’s basically Noon (the e-commerce) and 2-3 retail outlets. (It might be dual distribution model but if another distribution model is appropriate then you can use that)
Factors to Consider when Choosing Facility Locations:
Accessibility: The location of the facility should be easily accessible by transportation and convenient for the delivery of goods.
Proximity to Suppliers: The facility should be located close to the suppliers to reduce transportation costs and ensure timely delivery of products.
Availability of Skilled Labor: Availability of skilled labor is an essential factor when selecting a facility location. It’s important to ensure that there are enough skilled personnel to operate the facility.
Cost of Real Estate: The cost of real estate should be considered to ensure that the facility is affordable and cost-effective.
Market Demand: The facility should be located in an area where there is a high demand for skim milk products. This will help to ensure that sales are maximized and that the business is profitable.
Factor Weighting Method:
The factor weighting method can be used to determine the most suitable location for the facility. Each factor is assigned a weight based on its relative importance, with a total weight of 100%.
Accessibility – 20%
Proximity to Suppliers – 30%
Availability of Skilled Labor – 20%
Cost of Real Estate – 20%
Market Demand – 10%
The factor with the highest weight is the proximity to suppliers, followed by accessibility and availability of skilled labor. Cost of real estate and market demand are also essential factors but carry less weight.
Distribution and Transportation Business Model:
For our e-business, we plan to use a dual distribution model. We will use the Noon application to sell our skim milk products and also set up 2-3 retail outlets in different locations within the UAE.
Our choice of the dual distribution model is based on the following factors:
Wide Market Coverage: Using the Noon application allows us to reach a broader audience since it’s accessible to people all over the UAE. Setting up retail outlets in different locations will also enable us to reach customers who prefer to purchase directly from physical stores.
Cost-Effective: This distribution model is cost-effective since we don’t have to incur the cost of setting up many physical stores. We can leverage the existing infrastructure of the Noon application to sell our products.
Customer Convenience: The dual distribution model provides convenience for customers who can choose to purchase products through the Noon application or visit the retail outlets to buy directly.
In conclusion, choosing the appropriate facility location and distribution model is essential for the success of any business. By using the factor weighting method, we can make informed decisions on facility locations, and by adopting a dual distribution model, we can effectively reach a wide range of customers while ensuring cost-effectiveness and convenience.