1. Why do transportation costs decrease as the number of warehouses in a system increases? Why do inventory costs increase as the number of warehouses in a system increases? How this impacts BEST?

2. Explain how constraints in manufacturing are interrelated with a company's decisions regarding volume and variety. How this is applied in the case of BEST?

3. Assess warehousing location of BEST and its appropriateness. What factors should be taken into consideration when determining the appropriate number of warehouses?

4. Explain the value proposition offered by freight forwarding. Provide an example that illustrates why BEST would be attracted to using the services of a freight forwarder as contrasted to arranging their own transportation.

Case: BEST BEST \& Co. is a Company located near to Barcelona. They manufacture and distribute computer screens. The are producing 5 different models (screen sizes). Sales volume of the different sizes during the last 3 years was as follows: In order to assembly any model, 10 different components are required. Six of these components are common two all models whereas the other four are specific for each size. Profit and loss results of the last three years as well the forecasted one for 2018 are as follows: The behavior of the available cash has been the following: "BEST" is selling the screens in Spain, France and Portugal. Customers are big distribution Companies as well as wholesalers. 30% of the total sales are concentrated during the Christmas period. Main customers in 2019 were (under brackets central warehouse) - El Corte Ingls (Madrid): 5 Mio - Carrefour (Paris): 3,5 Mio - FNAC (Barcelona): 3 Mio - The rest are 9 wholesalers/distributors located in Bilbao (2), Valencia (2), Zaragoza, Sevilla, Oporto (Portugal), Vigo and Bordeaux (France). All these customers bought less than 0,5 Mio each. "BEST" has 4 warehouses: Barcelona (located in the factory), Madrid, Sevilla and Zaragoza. Inventory of all manufactured products (sizes) is available in all warehouses. Additionally, they always have safety stock of at least 20 days average sales of all products in the central warehouse. The delivery time agreed with customers are 4 labor days. Total time for assembly is 2 days. Factory works from Monday to Friday. financial and cash requirements for running the daily activity