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Week 58 Wees 47 Week 37 Table 1: Historical Demand for 12 weeks Wella Weeks Web Weeks Week Weeb? Atlanta 33 45 37 38 55 30 18 Boston 26 35 49 40 46 48 55 44 34 Chic 22 55 72 62 Das 27 42 35 40 51 64 70 LA 43 40 74 Week 12 55 45 62 44 We11 23 30 35 38 18 28 27 45 95 43 55 47 65 35 38 56 Transportation, Ordering, and Holding Costs Currently with inbound transportation there is fixed ordering cost per order plus a variable transportation cost associated with it. For outbound transportation (regional warehouse to retailer) orders, which are typically much smaller in quantity, there is only variable transportation cost Table 2 provides inbound and outbound transportation cost associated with current distribution system. Table 3 provides information about (outbound) transportation costs per unit product from each existing regional warehouse to all other market areas, assuming this regional warehouse becomes the central warehouse as described in figure 1b. In case if KLF decides to add central warehouse to serve Atlanta, Boston, Chicago and Dallas regional warehouses, 3PL provider has agreed to provide similar cost model, Le floved ordering cost per order and variable transportation cost per unit ordered. Transportation cost quoted by 3PL from manufacturing facility to new warehouse for Los Angles) is $10 and from new warehouse to other four regional warehouse is $6. Table 4 provides ordering cost per order associated with current, single centralized warehouse and mix model distribution system. Corresponding holding cost is also given Table 2: Inbound and Outbound Transportation Costs per Unit with Current System Warehouse Inbound Outbound Atlanta $12.00 $13.00 Boston $11.50 $13.00 Chicago $11.00 $13.00 Dallas $9.00 $13.00 Los Angles 57.00 $13.00 Table 3: Outbound Transportation Costs per Unit in Single Centralized System Warehouse Atlanta Boston Chicago Dallas Los Angles Atlanta $13 Boston $16 $13 Chicago $16 $10 $13 Dallas $17 $17 517 $13 Los Angles $19 $19 $18 $10 $13 Table 4: Ordering Cost and Holding Cost (per unit per week) Cost at Ordering Cost Current System (figure la) Regional Warehouse $5550 Central Warehouse (Figure 1b) Central Warehouse $5550 Mix Model (Figure 1) Central Warehouse $3000 Regional Warehouse $3000 Holding Cost $1.25 $1.25 $1.00 $1.25 Question 1 Ord Cost Tot Cost Current Distribution Strategy (10)> Q Odle SS Avoiny Iny cost Atlanta Boston Chicago Dallas LA Total cost of the distribution system Question 2 r Or Periodic Review Inventory Policy for Distribution strategy la > Rase Stock SS Avg Inycos Atlanta Boston Chicago Tot Cost Dallas LA Total cost of Periodic Review Policy for system 10 Total cost of Continuous Review Policy for system la Percentage Change in the cost Comment on the comparison > Inbound Outbound Holding + Transportation Transportation Setup Cost Atlanta Boston Chicago Dallas LA Total cost of system la Week 58 Wees 47 Week 37 Table 1: Historical Demand for 12 weeks Wella Weeks Web Weeks Week Weeb? Atlanta 33 45 37 38 55 30 18 Boston 26 35 49 40 46 48 55 44 34 Chic 22 55 72 62 Das 27 42 35 40 51 64 70 LA 43 40 74 Week 12 55 45 62 44 We11 23 30 35 38 18 28 27 45 95 43 55 47 65 35 38 56 Transportation, Ordering, and Holding Costs Currently with inbound transportation there is fixed ordering cost per order plus a variable transportation cost associated with it. For outbound transportation (regional warehouse to retailer) orders, which are typically much smaller in quantity, there is only variable transportation cost Table 2 provides inbound and outbound transportation cost associated with current distribution system. Table 3 provides information about (outbound) transportation costs per unit product from each existing regional warehouse to all other market areas, assuming this regional warehouse becomes the central warehouse as described in figure 1b. In case if KLF decides to add central warehouse to serve Atlanta, Boston, Chicago and Dallas regional warehouses, 3PL provider has agreed to provide similar cost model, Le floved ordering cost per order and variable transportation cost per unit ordered. Transportation cost quoted by 3PL from manufacturing facility to new warehouse for Los Angles) is $10 and from new warehouse to other four regional warehouse is $6. Table 4 provides ordering cost per order associated with current, single centralized warehouse and mix model distribution system. Corresponding holding cost is also given Table 2: Inbound and Outbound Transportation Costs per Unit with Current System Warehouse Inbound Outbound Atlanta $12.00 $13.00 Boston $11.50 $13.00 Chicago $11.00 $13.00 Dallas $9.00 $13.00 Los Angles 57.00 $13.00 Table 3: Outbound Transportation Costs per Unit in Single Centralized System Warehouse Atlanta Boston Chicago Dallas Los Angles Atlanta $13 Boston $16 $13 Chicago $16 $10 $13 Dallas $17 $17 517 $13 Los Angles $19 $19 $18 $10 $13 Table 4: Ordering Cost and Holding Cost (per unit per week) Cost at Ordering Cost Current System (figure la) Regional Warehouse $5550 Central Warehouse (Figure 1b) Central Warehouse $5550 Mix Model (Figure 1) Central Warehouse $3000 Regional Warehouse $3000 Holding Cost $1.25 $1.25 $1.00 $1.25 Question 1 Ord Cost Tot Cost Current Distribution Strategy (10)> Q Odle SS Avoiny Iny cost Atlanta Boston Chicago Dallas LA Total cost of the distribution system Question 2 r Or Periodic Review Inventory Policy for Distribution strategy la > Rase Stock SS Avg Inycos Atlanta Boston Chicago Tot Cost Dallas LA Total cost of Periodic Review Policy for system 10 Total cost of Continuous Review Policy for system la Percentage Change in the cost Comment on the comparison > Inbound Outbound Holding + Transportation Transportation Setup Cost Atlanta Boston Chicago Dallas LA Total cost of system la