Annual ICC Store REX Annual ICC Distribution Center (BODDC only) Activity Based Costing (All costs "per unit" except for shipping) TRADITIONAL BOPUS BODFS BODDC X X Annual Turnover Altams Rems Citems 34.8% 34.8% 34.8% 32.1% 32.1% 32.1% 1.61x 3.22x 9.73x X X Average shipment weight (lbs) 37.21 8.97 143 EXOTXAverage Unit Cost XAMINAREX EXAverage Unit Price $100.00 $25.00 $5.00 $141.70 $35.43 $7.09 Customer Service Online $0.24 $0.18 $0.12 x x XXX x X X Customer Service Retail Store $0.48 $0.36 $0.24 Operations DC $0.12 $0.10 $0.08 Operations DC to Ship Direct to Customers process 50.83 $0.42 $0.24 Operations Retail Stores 50.60 $0.30 50.10 X Packaging for LTL/Small Packaging shipments $1.12 $0.53 $0.32 Packaging for TL shipments 50.12 50.08 $0.06 K Return Rate for Items Fulfilled from DC 18% 12% 6% Return Rate for Items Fulfilled from Retail Store 11% 7% 3% Return Rate for Items Sold or Picked Up at Retail Store 5% 3% 1% X E EX Returns cost to process $1.18 50.97 $0.76 Sales Increase projected Additional Customer purchase when picking up an order 18.2% 29.3% 65.7% Sales increase projected due to new BODDC channel 5.0% 4.2% 0.5% Sales Increase projected due to new BODFS channel 4.7% 4.0% 0.5% MR Sales increase projected due to new BOPUS channel 7.0% 15.3% 25.0% Shipping DC to Store T [per pound 50.07 $0.19 $0.27 X Shipping LTL/Small package DC to Customer (maximum 225 miles) (per pound Shipping LTL/Small package Retail to Customer (maximum 25 miles) (per pound) System Support/Management for Online Ordering 50.32 50.92 $3.71 50.24 $0.63 $2.70 50.17 $0.17 $0.17 QUESTION #2: On a second page identify the cost of each activity and the total delivered cost PER UNIT for A, B, and C items for each proposed channel. "Our transportation rates offer some interesting opportunities that shape channels," continued Stephanie, "Truckload (TL) shipping is always a much lower cost per pound than LTL/Small Package delivery such as FedEx or UPS. It is the economic principle of packaging in larger lots and shipping to a single retail store location compared to many small packages shipped to many locations. After the analysis we will be able to better determine the leverage points.