Supply Chain Cost to Serve Analysis The problem below is intended to reinforce concepts of Supply Chain Cost to Serve Analysis and prepare you for the test Remember all costs must be calculated as cost / unit. Some numbers are already in cost/unit, while others need to be calculated Use Excel to calculate the costs. List the variables in separate cells. Do not type numbers into cells, reference the cells You must show your work to receive credit. Type the formula with numbers next to the cell so your logic can be reviewed. Print hard copy and submit Excel file to drop box Assume that this is a replenishment order, meaning you are buying an item to replenish stock on the shelf For clarification purposes: Cost/Unit is the same as Cost per Unit Inventory carrying cost / unit of this activity is the same as the inventory cost or storage in the example Assume that you pay the transportation cost at the time the product is shipped You are a Buyer/Planner for shirts. You earn $95,000 per year. You order 10,000,000 shirts per year. You place your orders with a fax machine. It costs $135,000 to run the fax room. 245,000 orders are placed each year via fax machine. This particular order has 240 shirts in it. The shirts are made in Mexico at a cost of $22 per shirt. The shirts are shipped to the US via rail. It costs $170 and takes 6-days to ship the order to your Regional Distribution Center (RDC) in the US. The order of 240 shirts is received and stored in the RDC. Over the next 10-days, shirts are shipped to retailers in small shipments using UPS at a cost of $12/box. 20-shirts are in each box. It takes UPS 2-days to deliver the shirts to the store. While in the store, it takes approximately 4-days to sell the shirts to customers. The annual cost to carry or store inventory throughout the entire supply chain is 25-percent. 1. Create a flow diagram that documents the processes and inventory storage points 2. Assign costs to the flow diagram 3. Calculate the total landed cost 4. Analyze the following scenarios a. What if we shipped the shirts to the US on a truck. It would take 3-days to ship by truck and cost $180 for the order. Which scenario is most effective? b. What if the product is shipped to the store using next day air delivery. The cost for next day delivery is $15/box. Because it is shipped next day aire. one day of inventory would be kept on-hand in the store. Which scenario is most effective? c. Reconfigure the supply chain with the most cost effective scenarios? d. Calculate a new total landed cost. e. Calculate how much you would save with the reconfigured supply chain