Refer to Table $1$ below. Given that there are on average $25,000$ items inventory in the current DC in Greenville, NC$,$ estimate the total inventory levels for each of the additional DCs around the country. If inventory is valued at $$60$ per unit and ICC are $25\%,$ determine the cost that would accrue with each alternative. $($NOTE: Round inventory units UP to the nearest whole number, and work from there to calculate inventory costs and ICC$).$

Table $1$

$\backslash$table$[[$# DCs$,\backslash$table$[[$Units in$],[$Inventory$]],\backslash$table$[[$Inventory$],[$Value $($$$60)]],\backslash$table$[[$Inventory Carrying$],[$Cost $(25\%)]],$Lost Sales,$\backslash$table$[[$Extra Storage$],[$costs$]],$TOTAL COST,$\backslash$table$[[$Fill$],[$Rate$]]],[1-$Greenville,$25,000,,,,,70\%,],[2-$Raleigh,,,,,,$80\%,],[3-$Atlanta,,,,,,$90\%,],[4-$Chicago,,,,,,$95\%,]]$

Question $2$

Facts:

Company is at $70\%$ fill rate. Increasing the logistics network to four warehouses will allow for $95\%$ fill rate $($see Fill Rate column in Table $1).$

Find the optimal number of warehouses $($e$.$g$.$ where total cost is lowest$).$

HINT: Inventory Value $+$ ICC $+$ Lost Sales $+$ Storage $=$ Total Cost

Lost Sales Information:

$10,000$ units per order

$3,000$ orders per year

Profit per unit $=$$$2$

Profit per order $=$$$20,000$

Invoice deduction per order $=$$$150$

Percentage of incomplete orders back$-$ordered is $85\%$

Back order costs $($per order$)=$$$600$

Percentage of incomplete orders cancelled is $15\%$

Extra Storage Cost Information:

$70\%$ fill rate $=$ no additional storage costs

$80\%$ fill rate $=$ add $10\%$ of inventory value for extra storage costs

$90\%$ fill rate $=$ add $25\%$ of inventory value for extra storage costs

$95\%$ fill rate $=$ add $30\%$ of inventory value for extra storage costs