Your assignment involves studying a specific part of Grainger$$s supply chain. Grainger works with over $150$ suppliers in the China and Taiwan region. These suppliers produce products to Grainger$$s specifications and ship to the United States using ocean freight carriers from four major ports in China and Taiwan. From these ports, product is shipped to U$.$S$.$ entry ports in either Seattle, Washington, or Los Angeles, California. After passing through customs, the $20-$foot and $40-$foot containers are shipped by rail to Grainger$$s central distribution center in Kansas City, Kansas. The containers are unloaded and quality is checked in Kansas City. From there, individual items are sent to regional warehouses in nine U$.$S$.$ locations, a Canada site, and Mexico. The Current China$/$Taiwan Logistics Arrangement The contracts that Grainger has with Chinese and Taiwanese suppliers currently specify that the supplier owns the product and is responsible for all costs incurred until the product is delivered to the shipping port. These are commonly referred to as free on board $($FOB$)$ shipping port contracts. Grainger works with a freight forwarding company that coordinates all shipments from the Asian suppliers. Currently, suppliers have the option of either shipping product on pallets to consolidation centers at the port locations or packing the product in $20-$foot and $40-$foot containers that are loaded directly on the ships bound for the United States. In many cases, the volume from a supplier is relatively small and will not sufficiently fill a container. The consolidation centers are where individual pallets are loaded into the containers that protect the product while being shipped across the Pacific Ocean and then to Grainger$$s Kansas City distribution center. The freight forwarding company coordinates the efficient shipping of the $20-$foot and $40-$foot containers. These are the same containers that are loaded onto rail cars in the United States. Currently, about $160,000$ cubic meters of material are shipped annually from China and Taiwan. This is expected to grow about $20$ percent per year over the next five years. About $90$ percent of all the volume shipped from China and Taiwan are sent directly from the suppliers in $20-$foot and $40-$foot containers that are packed by the supplier at the supplier site. Approximately $15$ percent are packed in the $20-$foot containers and $85$ percent in $40-$foot containers. The $20-$foot containers can hold $28$ cubic meters $($CBM$)$ of material and the $40-$foot containers, $55$ CBM$.$ The cost to ship a $20-$foot container is $$410$ and a $40-$foot container, $$490$ from any port location in China or Taiwan and to either Los Angeles or Seattle. Grainger estimates that these supplier$-$filled containers average $85$ percent full when they are shipped. The remaining $10$ percent shipped from China and Taiwan go through consolidation centers that are located at each port. These consolidation centers are run by the freight forwarding company and cost about $$82,000$ per year each to operate. At the volumes that are currently running through these centers, the variable cost is $$5\mathrm{.}00$ per CBM$.$ The variable cost of running a consolidation center could be reduced to about $$1\mathrm{.}90$ per CBM using technology if the volume could be increased to at least $30,000$ CBM per year. Now there is much variability in the volume run at each center, and it only averages about $3,000$ CBM per site. Material at the consolidation centers is accumulated on an ongoing basis, and as containers are filled they are sent to the port. Volume is sufficient that at least one $40-$foot container is shipped from each consolidation center each week. Grainger has found that the consolidation centers can load all material into $40-$foot containers and utilize $96$ percent of the capacity of the container. Grainger ships from four major port locations. Approximately $10$ percent of the volume is shipped from the north China port of Qingdao, and $42$ percent is shipped from the central China port of Shanghai$/$Ningbo$.$ Another $10$ percent is shipped from Kaohsiung in Taiwan. The final $38$ percent is shipped from the southern Yantian$/$Hong Kong port. Consolidation centers are currently run in each location. Grainger management feels that it may be possible to make this part of its supply chain more efficient. Evaluate an alternative that involves consolidating all $20-$foot volume and using only a single consolidation center in Shanghai$/$Ningbo$.$ Assume that all the existing $20-$foot volume and the existing consolidation center volume is sent to this single consolidation center by suppliers. This new consolidation center volume would be packed into $40-$foot containers filled to $96$ percent and shipped to the United States. The existing $40-$foot volume would still be shipped direct from the suppliers at $85$ percent capacity utilization. What is the total cost to get the containers to the United States? Do not include U$.$S$.$ port costs in this part of the analysis.