ABC Company plans to construct a 60,000 sq. ft. of private warehouse and rent public warehouse as needed. Warehouse inventory turns at the rate of two times per month. One pound of merchandise occupies 0.2 cubic feet of warehouse space and can be stacked 10 ft. high. Given aisles, administrative space, and normal operating efficiency, only 50 percent of the total warehouse space is actually used for storage. A private warehouse can be constructed and equipped for $36 per sq. ft. and can be amortized over 20 years. The cost of operation is $0.03 per lb of throughput. Annual fixed costs amount to $20 per sq. ft. of total space. Space may also be rented for a storage charge on inventory of $0.06 per lb per month and a handling charge of $0.03 per lb of throughput. Monthly demands for a typical year are as follows: Month Demand (lb) Month Demand (lb) Jan. 1,000,000 July 1,250,000 Feb. 5,000,000 Aug 2,250,000 Mar. 3,000,000 Sept. 3,000,000 Apr. 2,000,000 Oct. 3,500,000 May 1,000,000 Nov. 4,000,000 June 250,000 Dec. 4,500,000 Q: How much storage space is needed for Jan.? O 20,000 sq. ft. O 40,000 sq. ft. O 60,000 sq. ft. O 80,000 sq. ft. O None of above Q: After some algebra, ABC finds out that Feb. needs a total of 100,000 sq.ft storage space. Therefore, ABC needs to rent some storage space from a public warehouse. How much does ABC pay for the public warehouse in Feb? $60,000 $100,000 $120,000 $160,000 O None of above D