In analyzing whether P&G should accept the $3$PL$$s proposal, please do the following:

$1.$ Build the existing network in the SIP software. Assume that every stage will hold safety stock.

Because P&G does not take ownership of any materials until they arrive at P&G$,$ make sure that

the $$Lead Time in Pipeline$$ box is not checked for any of the procurement stages. By default,

they will not be checked in the software. Note the Cost of Goods Sold and Holding Costs. Save

this scenario. You can also export it as a file if you wish.

$2.$ Modify the existing network to reflect the different time and cost added at Fill&Pack if the $3$PL is

used. Assume that every stage will hold safety stock. Note the Cost of Goods Sold and Holding

Costs. Save this scenario. You can also export it as a file if you wish.

$3.$ Now, examine each network and see if you can reduce the total inventory costs by choosing

which locations should hold safety stock. You can select whether a stage holds safety stock by

clicking on the red triangle at the stage. The software automatically updates the safety stock

quantities required in the network $($to achieve the specified service levels$)$ as you change the

safety stock locations. By default, the $$demand$$ stages, i$.$e$.,$ the distribution center stages in this

network, must hold safety stock.