Factory Gate PricingKnowledge Center |
7 items • 23.452 visits
Sign up for free
Welcome to the Factory Gate Pricing center of 12manage.
Here we exchange knowledge and experiences in the field of Factory Gate Pricing.
❗Sign up now to gain access to 12manage. It's completely free.
What is Factory Gate Pricing?Factory Gate Pricing (FGP) is an approach to purchasing goods, under which (low) ex-works purchasing prices are agreed for products, and the buyer is responsible for arranging the transportation of the product from the supplier to the delivery points. Typically, the customer is also responsible for insuring the products against damage during transit. FGP requires and leverages efficient transport systems of (large) buyers (alternately a large 3PL can also be used). This is why Factory Gate Pricing is popular in retail and automotive environments. Big retailers and car assemblers can combine primary Less Than Truckloads shipments from several suppliers into Full Truck Loads. Such primary distribution can even be combined with secondary distribution (shipments from distribution centers or assembly plants to retail outlets). This combination is called "Backhauling". The main benefits of Factory Gate Pricing are:
Just as Vendor Managed Inventory, the Factory Gate Pricing concepts is centralizing the responsibility for stock levels to reduce supply chain costs and realize lower prices for end consumers. Factory pricing is also referred to as supplier collection or ex-works pricing.
Compare with: Vendor Managed Inventory | CPFR | Just-in-time | Vertical Integration | Third Party Logistics |
|
Return to Management Hub: Supply Chain & Quality More on Management | Return to Management Dictionary |
This ends our Factory Gate Pricing summary and forum. |
About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
© 2024 12manage - The Executive Fast Track. V17.2 - Last updated: 17-5-2024. All names ™ of their owners.