1. What can be said about the optimal order quantity at the fulfillment center in part (b) compared with the optimal order quantity at each store in part (a)?

Group of answer choices

The optimal order quantity at the fulfillment center in part (b) is 5 times of the optimal order quantity at each store in part (a).

The optimal order quantity at the fulfillment center in part (b) is 9 times of the optimal order quantity at each store in part (a).

The optimal order quantity at the fulfillment center in part (b) is the same as the optimal order quantity at each store in part (a).

2. Under the optimal order quantity in part (a) and the optimal order quantity in part (b), what can be said about the inventory holding cost?

Group of answer choices

The total inventory holding cost from 9 stores in part (a) is 5 times of the inventory holding cost in the fulfillment center of part (b).

The total inventory holding cost from 9 stores in part (a) is 3 times of the inventory holding cost in the fulfillment center of part (b).

The total inventory holding cost from 9 stores in part (a) is 9 times of the inventory holding cost in the fulfillment center of part (b).

The total inventory holding cost from 9 stores in part (a) is the same as the inventory holding cost in the fulfillment center of part (b).

The optimal order quantity at the fulfillment center in part (b) is 3 times of the optimal order quantity at each store in part (a).

3. Under the optimal order quantity in part (a) and the optimal order quantity in part (b), what can be said about the ordering cost?

Group of answer choices

The total ordering cost from 9 stores in part (a) is 5 times of the ordering cost in the fulfillment center of part (b).

The total ordering cost from 9 stores in part (a) is 9 times of the ordering cost in the fulfillment center of part (b).

The total ordering cost from 9 stores in part (a) is the same as the ordering cost in the fulfillment center of part (b).

The total ordering cost from 9 stores in part (a) is 3 times of the ordering cost in the fulfillment center of part (b).

4. What other factors besides the inventory and ordering costs they should consider before implementing the Internet Initiation?

Group of answer choices

Cost of building the website

Shipping, packaging and delivery expenses

Cost of product returns from online purchase

Inventory Group Assignment MGT 3121 Professor Li You can discuss this assignment with your group members, but you will need to complete and submit the quiz on Canvas (2 attempts) individually. Palu Gear is mountaineering gear retail store operating in Northern Colorado. From its humble beginning of one store, the chain has expanded to 9 stores spread across the area. The most popular items sold by Palu Gear is an in-house designed high- tech "Palu jackets". These jackets are sold throughout the entire year and their demand is not materially affected by time of the year. Annual jacket revenues for each store were of similar size and amounted to roughly $1,000,000 per store. The jackets are manufactured by suppliers located in Maxico, and are sold at the price of $325 per unit, which represented a mark-up of 30% above what Palu paid the supplier. Palu Gear has an annual cost of inventory of 20%. (a) The current supply chain for Palu Jackets operated as follows. Being a profit center, each store made its own inventory decisions, and each store is supplied directly from the supplier by a truck. A shipment of up to a full truckload, which was more than 5000 jackets, was charged a flat fee of $2,200. What is the optimal order quantity each store should order? What is the total the inventory and ordering costs with this quantity? (b)Looking into the future, Palu Gear is contemplating a new initiative to transform the brick-and-mortar retail business into an Internet store. This would involve closing down the nine retail stores and opening up one fulfillment center to serve the entire market. The freed-up rent and store operating cash flow would easily cover the rent for the fulfillment center and web hosting. In addition, the management of the Palu Gear feels that consolidated inventory management should provide considerable savings over the current setup. Assuming the total demand for Palu Jackets stays the same, what is the optimal order quantity the fulfillment center should order? What are the savings in the inventory and ordering costs on Palu jackets resulting from implementing the aforementioned Internet Initiative