3. The key issues of logistic decision
(1) Which manufacturers and distribution
centers were necessary to be existed?
(2) How many materials and semi-finished
products were required?
(3) How many products should be
manufactured by factory?
(4) How many products should be sent from
factory to distribution center, or from
distribution to customer?
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4. Objectives
(1) Analyze the interactive relationship among
manufacturers, material suppliers,
distribution centers and customers, then
build up the logistic distribution
mathematical models.
(2) To evaluate the operation cost based on
these models while adopting different
BTO or CTO logistic model.
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5. BTO and CTO logistic system
BTO
Distributor Global OEM Key Parts
Manufacturer Supplier A
Customer
CTO
Production
Assembly Warehouse of Oversea Node of
Center of Manufacturer Assembly Standard-
Distributor or Distributor Center equipped
(Assemble to Product
standard
specified Key Parts
Information flow products) Supplier B
Goods flow
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6. The characteristic comparison of
different distribution models
Description Model 1: Model 2: Model 3: Model 4:
Basic BTO BTO Basic CTO CTO
1.Raw material
2.Manufacturing cost
3.Transportation cost
4.Storage cost
5.Custom duty
6.Oversea assembly
7.Oversea Hub
(Semi-finished)
8.Shipment method By air By air DHL 24 hrs DHL24 hrs
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7. Basic information of distribution model
Key Price Material
Specification
components （USD） supply country
LCD 13.3 Inches 510 Japan, Korea
LCD 14.1 Inches 540 Japan, Korea
LCD 15 Inches 610 Japan, Korea
DRAM 64M 9.01 Japan, Korea
（Resource: TSR, 1999/12）
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8. Test results of logistic models
M odel 1 M odel 2 M odel 3 M odel 4
M odel
Taiw an U SA UK Taiw an U SA U K Taiw an U SA U K Taiw an U SA UK
M aterial supplier / Production country
LCD from Japan 19274 0 0 19274 19044 0 19274 0 0 19274 0 0
LCD from K orea 0 0 0 0 0 0 0 0 0 0 0 0
DRA M from
19274 0 0 19274 19044 0 19274 0 0 19274 0 0
Japan
DRA M from
0 0 0 0 0 0 0 0 0 0 0 0
Korea
M aterials storage
0 0 0 0 0 0 0 0 0 0 0 0
-Taiw an
M aterials storage
0 0 0 0 0 0 0 0 0 0 0 0
-U SA
Production node / D em and node
Taiw an
230 13908 5136 230 13908 5136 19274 0 0 230 13908 5136
production
USA production 0 0 0 0 0 0 0 0 0 0 0 0
Products storage 1390
0 0 0 0 0 0 230 5136 0 0 0
-Taiw an 8
Products storage
0 0 0 0 0 0 0 0 0 0 0 0
-U SA
Products storage
0 0 0 0 0 0 0 0 0 0 0 0
-U K
Total cost (N TD ) 386304638 386514618 415404548 441804118
Index 100 100 108 114
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9. The cost impact of BTO/CTO model
(1) The custom duty affects little on the logistic cost.
(2) If key parts are imported from Japan or Korea,
under current tax law, the duty rate will be 0.06%
business duty, and 0.045% trade promotion duty,
in case they are sold to the domestic market.
(3) Under the BTO/CTO models, we can see the
operation cost of CTO is higher than BTO.
(4) We don’t see any merit of CTO from cost
viewpoint, but it appears in shortening the
maximum allowed lead time.
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10. 傳統BTF生產組裝之模式
Taiwan Info Center Materials
Taiwan Info Center Materials
US Market Manufacture
US Market Manufacture
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13. 當地設立組裝廠BTO模式圖
Taiwan Info C Taiwan Factory
Taiwan Info
Taiwan Factory
Center
US Market Manufacture Mats in USA
US Market Manufacture Mats in USA
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