Question: The hottest set top box available is made by Set Top Box International. Right now, they outsell both BestBuy and Target in terms of sales.

The hottest set top box available is made by Set Top Box International. Right now, they outsell both BestBuy and Target in terms of sales. Inventory, however, is a problem for Set Top Box International. Given the brief lifespan of their product. when a new product is introduced, companies frequently write off a sizable amount of their inventory. They currently operate a completely automated facility Allstate Rd, Boston. Each year, they sell roughly 960,000 units. Right now, they manufacture product until they have a full truck load (4,000 set tops), at which point they send a complete truck load to their Illinois distribution center for $600.00. Following that, the distribution center mails out individual units to online clients for a shipping and handling fee of $22.00. Retailers receive LTL truck shipments from the distribution facility. 400 of each are shipped out at a time. For these shipments, the distribution center charges $400.00. The distribution center also has a fixed monthly fee of $5,000 dollars. Set Top Box International sells its units online for $100 each, while charging $82 to large retailers like Wal-Mart. 30% of their clientele are retail clients. Each Set Top is produced at a cost of $53.00 to Set Top Box International. According to a year-end audit, Set Top Box International was writing off at least 2,000 set top boxes every year of excess inventory at their distribution facility because the boxes were obsolete when the new model was released. With this new gathered information, what would Set Top Box International do?
A. Go with the original model and only add the UPS model
B. Go with the original model and only add the lean model
C. Go with the original logistics model
D. None of the Above

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