Part I: What's Mr. Stanton's challenge?

Tate: Your challenge is to lower distribution costs.
Stanton: But, not at the expense of our reputation.
Tate: No, you still have to deliver on time.
Stanton: If we loer distribution costs, we cant't keep our delivery promise.
Tate: Or, keep your inventories low.
Stanton: It's a real balancing act.
Tate: One cost goes up. Another comes down.
Stanton: It's hard to keep things on an even keel.


Part II:How can Direct Computers Lower distribution costs?

Tate: Nonetheless, Direct Computers has really grown in the last tow years.
Stanton: Sales have increased by onve 100%.
Tate: You know. That my be the solution to your high distribution costs.
Stanton: I don't understand. I still have to deliver the computers.
Tate: Yes, but why do it yourself?
Stanton: You mean, outsource the distribution?
Tate: Why not? You have the volume to negotiate some very favorable rates.
Stanton: Hmmm, we pay another company to deliver the computers.

Part III: What is Ms. Tate money-saving idea?

Tate: Here's another money-saving idea.
Stanton: Money-saving or money-making?
Tate: Both. Here's what I mean, you need the components on site,right?
Stanton: Right. So we can asemble the computers quickly.
Tate: What about monving the suppliers to your hubs?
Stanton: You mean, to produce components at our hubs?
Tate: Exactly. How does that strike you?
Stanton: Let me mull it over, I'll get back to you.