total cost calculation, using the following data. You are required to calculate the total cost for operating
Question:
total cost calculation, using the following data. You are required to calculate the total cost for operating one DC and two DCs. This is most effectively done in excel.
Sales per year: $2,500,000
Property tax: 12% (both locations)
Operating days per year: 260
Staff per DC: 90
Warehouse fixed cost: $1,800,000
Warehouse variable cost per case: $0.45
TL per year with 1 DC: $175,000
Increase in TL with a new DC: $70,000
LTL per year with 1 DC: $250,000
Supplier incoterms: EXW
Lead time: Supplier to DC = 1 day
Customer service level target: 98% fill rate
Increase in lead time with each additional DC: 30%
Return on assets target: 11%
Base inventory with 1 DC: $900,000
SS with 1 DC: $ 150,000
Inventory Carrying Cost: 28%
Reorder cost per DC: $300
Total LTL cost decreased by 1 DC to 2 DCs: 29%