2/3 100% e. Weight density of product and Logistics cost 7. [20 points] A company is considering two logistics options. In option 1, the company is considering an all-ground route from its manufacturing plant to the customers directly. In option 2, the company would use a market-oriented warehouse to distribute to the customers. The finished goods would be shipped from the manufacturing plant to the warehouse and then packaged and sent to the customer in option 2. The logistics costs for 100,000 units of output is given in the following table. Option 1 (dollars) Option 2 (dollars) Packaging Storage and handling Inventory carrying 1000 0 150 50 100 50 Administrative 250 100 Other fixed costs 5000 3000 Transportation: to warehouse 0 200 Transportation: to customer 1200 500 Warehouse: packaging 0 750 Warehouse: storage and handling 0 150 Warehouse: inventory carrying 0 150 Warehouse: administrative 0 200 Warehouse: other fixed costs 0 3000 a. Which option would you choose? Why? b What would be the reasons to choose the other option?