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Creating a New Business within Reverse Logistic Industry

Defining the Business: Jeffrey and Sons Warehousing Business

Logistic management: refers to the strategic process of managing the procurement, movement, and storage of products through the business and its supply marketing chains to increase profitability and ensure orders are fulfilled cost-effectively.

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Procurement management: is a strategic method used by a business in optimizing its spending during the process of acquiring goods and services. Inventory management: is the sequential approach to sourcing, selling, and storing products by a business (Schwartz, 2020). Distribution management: refers to the process of overseeing the transfer of products from the supplier to the consumers.

Cost-Benefit Analysis

  • The cost-effectiveness ratio: is used to determine the effectiveness of the business in achieving its intended purpose.
  • Cost-utility ratio: is used to measure the business effect/ success gains of the business.
  • Benefit-cost ratio (BCR): is the factor by which the economic gains exceed the economic costs.
  • The Break-even point: is the period of time after which the economic business benefits equal the invested business resources.
  • Net Present Value (NPV): is the net monetary gain expected from the currency units at the start of the business.
  • Economic Internal Rate of Return (EIRR): is the business returns on the investment, representing the discount rate at which expected future benefits equal expected future costs.

Operating the Business

Location refers to the site which is required to be spacious (easy movement of products, people, and machines), be better connected to a means of transport, and secure. Employees should be familiar with the machines to be used in the warehouse business (Ketchen & Craighead, 2020). Manual procedures should consider automation of the business as a way of gaining a competitive advantage. The manual procedure outlines how the business operation will be conducted daily.

Warehouse business automation is costly since it requires the devices and machines to bend towards reduction of the labor costs, assist in streamlining the warehouse operation, and therefore, increasing efficiency.

The equipment necessary for automation includes automated stockers and pickers, devices for package fulfillment, and machines for order processing and labeling of packages.

Capital Acquisition

The financing of the warehouse will be important because it will influence the organization’s operations. The key stakeholders will also inject funds from external sources to ensure the smooth operation of the modern warehouse alongside the loan which will be acquired. Additionally, because the warehouse business is highly lucrative in the reverse logistic industry, the business will get profits within a short duration which will be plowed back into the business.

Business Plan for Global Expansion

Documentation of the Jeffrey and Sons warehouse business vision and how it will be achieved guides the business towards working within a time limit and having practical strategies. They provided relevant and vital information about the business to potential investors.

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The Jeffrey and Sons business model descriptions outline the vision, objective, goals, nature, and the reason for starting the business. The strategy for marketing entails the description of the target market segment who are targeted by the warehouse business. The business plan gives a rough estimate of the required amount of inventory for starting, equipping, and operating the warehouse business. Similarly, it will provide a projection of the expected sales, operational costs, overhead costs, and the anticipated profits margins.


Gud Capital (2018). Warehouse & storage facility loans: working capital for warehouses & self-storage companies. Web.

Ketchen, D., & Craighead, C. (2020). Research at the intersection of entrepreneurship, supply chain management, and strategic management: opportunities highlighted by COVID-19. Journal Of Management, 46(8), 1330-1341. Web.

Schwartz, L. (2020). Distribution management defined. Web.

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