Question: 8. Assuming that the inventory holding cost is based on an annual rate of 37%, fill out the following table. Cost Category Retain Atlanta Close

 8. Assuming that the inventory holding cost is based on an

annual rate of 37%, fill out the following table. Cost Category Retain

8. Assuming that the inventory holding cost is based on an annual rate of 37%, fill out the following table. Cost Category Retain Atlanta Close Atlanta 1. Transportation Charlotte to Atlanta: 8/month x $725/load /month Columbia to Atlanta: 4/month x $625/load /month Total /month Charlotte to Atlanta: 20/month x $725/load /month Columbia to Charlotte: 4/month x $260/load /month Total month 2. Warehousing Atlanta warehouse: $5,250 + $6,500 /month Cross-Docking month Sub-total /month month year /year 3. Incremental Inventory Carrying Costs $160,000 x 37% year Total Costs year year Differential (per year) year 9. Based on the previous two questions, what is your recommendation, retain or close the Atlanta warehouse? 10. Are the potential for cost savings from closing the Atlanta warehouse worth the risks? 11. What is Cameron's average service level currently? 12. Assume that the inventory holding cost is based on an annual rate of 37 percent. Suppose that the Atlanta warehouse currently receives 10,000 orders annually from the dealers in its region. If the backorder cost is estimated to be $250 per order, how much decrease in the service level would you be willing to tolerate when closing the Atlanta warehouse

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!