Business Logistics Homework 4 Questions Please Show All Work 1. A manufacturer is considering the cost of establishing a warehouse for a market in which it currently ships all products directly to the customer. The current cost for an average direct-to-customer shipment of 1000 lbs. is $10.00 per cwt (hundredweight). The cost for volume shipments (10,000 + lbs.) to the market warehouse is $2.00 per cwt, and the cost for local delivery within the market from the warehouse is $4.00 per cwt. Can the manufacturer justify the use of a warehouse in this situation? Please show all work to arrive at your decision. Assumptions and alternatives are summarized below: Manufacturer direct ship to customer Average shipment = 1000 lbs Freight rate to customer = $10.00 per cwt OR Ship to warehouse market at: Volume transport rate = $2.00 per cwt For shipments 10,000+ lbs Local delivery within market = $4.00 per cwt 2. A firm is attempting to estimate the inventory impact of adding warehouses to its network. Utilizing the square root rule, determine the safety stock level needed for networks with 6 10 facilities in the table below. The existing network has one (1) location with assumed existing inventory safety stock level of 100, and the firm has already determined the safety stock needed for adding network locations 2 5 using the square root rule. The square root rule formula is: SSj = Nj x SSi Ni Where SSj = Total safety stock for Nj warehouses or product variations (future safety stock) Nj = # of warehouse locations or product variations for new network Ni = # of warehouse locations or product variations for existing network SSi = Total safety stock for Ni warehouses or product variations (existing safety stock) Network Locations Safety Stock Level 1 100 2 141 3 173 4 200 5 224 6 7 8 9 10 SHOW ALL WORK FOR EACH SAFETY STOCK CALCULATION ABOVE 3. A firms existing safety stock inventory is 100 units in a three (3) facility network. What will the future safety stock inventory be if the firms network is expanded to six (6) facilities? SHOW ALL WORK.