Brookfield Business Partners bought Johnson Controls' car battery line in 2019 and has rebranded the business unit as Clarios. Clarios has forecasted the demand in 2020 for these batteries in the following table: 2020 Battery Demand (units) Apr Oct Jul Aug Sep Nov Dec Feb May Jun Jan Mar 50,000 55,000 62,000 55,000 51,000 57,000 32,000 36,000 37,000 42,000 60,000 59,000 Assume that Clarios' storage area is 100% utilized and 50% of the space is reserved for aisles and space between the product. The car batteries have an annual turnover of 6 times per year (0.5 times per month). Each battery is 0.9' long by 0.6' wide and 0.7' high and are stored 5 high on pallets. If Clarios wants to ship all the orders out of their own facility in 2020, how much storage space (in square feet) should be allocated? (2 points) a) Clarios is considering using 15,000 square feet of storage space in their current facility next year and outsourcing their additional space needs. The warehouse was constructed for a cost of $50 per square foot, amortized over 30 years, and orders are picked at a variable cost of $1.50 per unit. Annual building maintenance fixed costs are $5 per square foot of total space. January will require 21,600 square feet of storage space so space may be rented for a space charge of $0.10 per unit per month and an in-and-out handling charge of $0.05 per unit. b) What is the Private Space Fixed Cost for January? (2 points) c) What is the Private Space Variable Cost for January? (2 points) d) What is the Rented Space Fixed (Storage) Cost for January? (2 points) e) What is the Rented Space Variable Cost for January? (2 points) Brookfield Business Partners bought Johnson Controls' car battery line in 2019 and has rebranded the business unit as Clarios. Clarios has forecasted the demand in 2020 for these batteries in the following table: 2020 Battery Demand (units) Apr Oct Jul Aug Sep Nov Dec Feb May Jun Jan Mar 50,000 55,000 62,000 55,000 51,000 57,000 32,000 36,000 37,000 42,000 60,000 59,000 Assume that Clarios' storage area is 100% utilized and 50% of the space is reserved for aisles and space between the product. The car batteries have an annual turnover of 6 times per year (0.5 times per month). Each battery is 0.9' long by 0.6' wide and 0.7' high and are stored 5 high on pallets. If Clarios wants to ship all the orders out of their own facility in 2020, how much storage space (in square feet) should be allocated? (2 points) a) Clarios is considering using 15,000 square feet of storage space in their current facility next year and outsourcing their additional space needs. The warehouse was constructed for a cost of $50 per square foot, amortized over 30 years, and orders are picked at a variable cost of $1.50 per unit. Annual building maintenance fixed costs are $5 per square foot of total space. January will require 21,600 square feet of storage space so space may be rented for a space charge of $0.10 per unit per month and an in-and-out handling charge of $0.05 per unit. b) What is the Private Space Fixed Cost for January? (2 points) c) What is the Private Space Variable Cost for January? (2 points) d) What is the Rented Space Fixed (Storage) Cost for January? (2 points) e) What is the Rented Space Variable Cost for January? (2 points)
