According to the dollar tree logistics case study, published by Darden business publishing by university of Virginia,

$1$

$.$

$$Address at least

$3$

$$following objectives

$($

a

$-$

e

$)$

in the report and explain them:

a

$.$

$$Demonstrate basic trade

$-$

offs in distribution

$-$

network design.

b

$.$

$$Apply scale

$-$

curve analysis.

c

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$$Reinforce inventory

$$

big picture

$$

$$thinking$.$

d

$.$

$$Consider broader business issues.

e

$.$

$$Need to go beyond the hard numbers.

$2$

$.$

$$What are the components of the cost structure of the Dollar Tree logistics system?

$3$

$.$

$$How important is economy of scale for the DCs

$?$

$$Compute the utilization curve for the Briar Creek DC and the scale curve for all the automated DCs

$.$

$4$

$.$

$$What other operations

$-$

strategy opportunities should Dollar Tree consider to further decrease total supply

$-$

chain costs?

$5$

$.$

$$Which of the two options for DC capacity expansion, using the scale and utilization curves, do you recommend? Why?

$6$

$.$

$$What do you recommend?

$($

vote in your group and explain it

$)$

a

$.$

$$Expand or b

$.$

$$Build new.

c

$.$

$$Does your recommendation conflict with your quantification of the benefits for anyone?

$7$

$.$

$$What are the cost elements and drivers?

$($

What percent each, explain it

$)$

a

$.$

$$Inbound transportation

b

$.$

$$DC facility cost

c

$.$

$$Outbound transportation

d

$.$

$$Inventory carrying cost.

Hint: Compute the DC cost

$,$

$$using the scale and utilization calculations, and the outbound trucking cost for each option, for the first three years after expansion

$($

$2$

$0$

$0$

$5$

$)$

$,$

$$then test the sensitivity of the cost to the forecast of sales growth. Don

$$

t consider the time value of money.