How does Costco manage its logistics and physical distribution activities?

• Gregory
• June 17, 2021

Logistics and Physical Distribution Management of Costco                                                            

Basic background:

Costco Wholesale (also known simply as Costco) is a multinational corporation, which operates in the mode of membership-only (consumers must buy memberships to shop there) and big-box retail stores.

In the meantime, Costco has gradually expanded its range of products and services over the years. It now sells many products covering different categories, such as perishable items (e.g., dairy, fresh products, meat, and seafood), clothing, wine, furniture, and home electronics. In addition, Costco follows a frequently changing inventory system in its daily operations, which means it only holds its products for a limited time period before discontinuing them as seasonal products.

Good logistics and physical distribution management therefore is crucial for Costco in its daily operations and deserves deep exploration.

Requirements:

1. Write an individual report (around 1,500 words) and discuss the logistics and physical distribution activities in Costco by following the below structure.

Part I: General background

• Suggested word limit: 100 words
• Provide a brief introduction to Costco, e.g., its operational modes.

Part II: How does Costco manage its logistics and physical distribution activities?

• Suggested word limit: 400 words
• Topics to be covered are listed below (Point 3).

Part III: How does the COVID-19 pandemic influence the Costco’s logistics and physical distribution management?

• Suggested word limit: 500 words
• Topics to be covered are listed below (Point 3).

Part IV: How does Costco manage the logistics and physical distribution activities of its product leftovers?

• Suggested word limit: 500 words
• It could be about reverse logistics, food leftover sharing, or any other logistics and physical distribution activities related to its product leftovers.
• For example, the discussions could be the food leftover sharing logistics network such as: the detailed category of the product (e.g., Fruits? Vegetables? Or, everything?), the partners / supply chain members (e.g., the brands, the location, etc.), the collection points, etc.

2. The report should be Costco based and focus on its logistics and physical distribution management.
3. Topics to be covered: Each report is suggested to cover 2 topics in the following (Transportation Management, Distribution Management, Warehousing Management, Information Systems for Logistics, Customer Service in Logistics. Simultaneously including all above is definitely not suggested.

(Topics like 3PLs, 4PLs, and Reverse Logistics are optional (from Week 3)).

4. References should be clearly provided, which can be related websites, official reports, government reports, news, and magazines. In the meantime, recent academic journals (Published in Year 2018 and after) are required to be citied.

plies.