Caldwell Supply, a wholealer, has determined that its operations have three primary activities: purchasing,...

Caldwell Supply, a wholesaler, has determined that its operations have three primary activities: purchasing, warehousing, and distributing. The rm reports the following operating data for the yearjust completed: lmaintityr of Cost per Unit of Cost Activity Cost Driver Cost Driver Driver Purchasing Number of purchase orders 1,070 $ 157II per order warehousing Number of moves 8,?69 3? per move Distributing Number of shipments 57D 87 per shipment Caldwell buys 100,700 units at an average unit cost of $17 and sells them at an average unit price of $27. The rm also has xed operating costs of $250,700 for the year. Caldwell's customers are demanding a 17% discount for the coming year. The company expects to sell the same amount ifthe demand for price reduction can be met. Caldwell's suppliers, however, are willing to give only a 11% discount. Required: Caldwell has estimated that it can reduce the number of purchase orders to 750 and can decrease the cost of each shipment by $10 with minor changes in its operations. Any further cost savings must come from reengineering the warehousing processes. What is the maximum cost {i.e., target cost} for warehousing if the firm desires to earn the same amount of prot next year? _:|