Calculate a total cost calculation for ACME Supply using the following data. Required to calculate total cost
Question:
Calculate a total cost calculation for ACME Supply using the following data. Required to calculate total cost calculation for operating one DC and two DCs.
Sales per year: $2,500,000
Property tax: 12% (both locations)
Operating days per year: 260
Staff per DC: 90
Warehouse fixed cost: $1,800,000
Warehouse variable cost per case: $0.45
TL per year with 1 DC: $175,000
Increase in TL with a new DC: $70,000
LTL per year with 1 DC: $250,000
Supplier incoterms: EXW
Lead time: Supplier to DC = 1 day
Customer service level target: 98% fill rate
Increase in lead time with each additional DC: 30%
Return on assets target: 11%
Base inventory with 1 DC: $900,000
SS with 1 DC: $ 150,000
Inventory Carrying Cost: 28%
Reorder cost per DC: $300
Total LTL cost decrease by 1 DC to 2 DCs: 29%