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1.Relative to the U.S. distribution network, calculate the cost associated with running the existing system. Assume that 40 percent of the volume arrives in Seattle and 60 percent in Los Angeles and the port processing fee for federal processing at both locations is $5.00 per CBM. Assume that everything is transferred to the Kansas City distribution center by rail, where it is unloaded and quality-checked. Assume that all volume is then transferred by truck to the nine existing warehouses in the United States.

Grainger: Reengineering the China/U.S. Supply Chain When something is needed by one of its customers, it is often needed quickly, so quick service and product availability are key drivers to Grainger's success. Grainger: U.S. Distribution require accounting adjustments. demand forecasts for the items purchased from China/Taiwan for next year in cubic meters and shipping distances are given in the following table: current location of the Los Angeles warehouse. Grainger management feels that it may be possible to make this change, but it is not sure if it would actually save any money and whether it would be a good strategic change. Specific Questions to Address in Your Analysis