a company want to reduce its distribution costs and have read that many companies have adopted a more centralized distribution structure to reduce them. The company therefore plans to investigate whether there may be an option. The company warehouses in Sweden, UK, Germany, Spain, Turkey,Slovakia, France, and Romania, and the demand for these warehouses are approximately equal. The cost for this structure is: The option means that the company only has one warehouse and liquidate the rest. This will mean that warehousing costs are reduced to 1 600 000 SEK/ year, and that transportation costs will increase to 2 800 000 SEK/ year. The company will need to invest in a new information system, which will mean that these costs will increase to 640 000 SEK/ year. Stock Keeping costs in the current option consists of 75% of the cycle stock. The cycle stock will overall be the same in the more centralized alternative. The remaining 25% of the stock keeping costs of the current option is the cost of safety stock. The warehousing before change is 3,500,000, stock keeping cost before change is 3,200,000,transporation cost before change is 1,900,00 and information cost before change is 360,000.

Question : is that a good way for this company change their distribution structure? why?