Try using the information contained in the exhibits and using them, analyze exhibit $11$ which compares both options.

Answer the following questions:

$1.$ What are the components of the cost structure of the Dollar Tree Logistics system?

$2.$ How important is economy of scale for the DC$$s$?$ Compute the utilization curve for the Briar Creek DC and the scale curve for all automated DCs$.$

$3.$ What other operations strategy opportunities should Dollar Tree Logistics consider to further decrease total supply chain costs?

$4.$ Which of the two options for DC capacity expansion, using the scale and utilization curves, do you recommend and why?

Hint: Computer the DC cost$,$ using the scale and utilization calculations, and the outbound trucking cost for each option, for the first three years after expansion $(2005),$ then test the sensitivity of the cost to the forecast of sales growth. Don$$t consider the time value of money.