\fIn Kansas City the containers are unloaded and processed through a quality assurance check. This costs $2.00 per CBM processed. A very small percentage of the material is actually sent back to the supplier, but errors in quantity and package size are often found that require accounting adjustments. Items are stored in the Kansas City distribution center, which serves nine warehouses in the United States. Items are also sent to warehouses in Canada and Mexico, but for the purposes of this study we focus on the United States. The nine warehouses each place orders at the distribution center that contains all the items to be replenished. Kansas City picks each item on the order, consolidates the items onto pallets, and ships the items on 53-foot trucks destined to each warehouse. Truck freight costs $0.022 per CBM per mile. The demand forecasts for the items purchased from China/Taiwan for next year in cubic meters and shipping distances are given in the following table. DEMAND (CBM) DISTANCES WAREHOUSE AVERAGE MILES FROM KANSAS CITY MILES FROM LOS ANGELES MILES FROM SEATTLE Kansas City 20, 850 1, 600 1, 840 Cleveland 16,970 750 2, 240 2, 410 Newark 24, 640 1, 150 2, 630 2, 890 Jacksonville 15, 210 1, 090 2, 420 2,990 Chicago 22, 710 530 2, 070 2, 080 Greenville 15, 210 850 2, 250 2,990 Memphis 16,970 520 1, 880 2, 220 Dallas 22, 710 510 1, 540 2, 220 Los Angeles 34, 110 1, 600 1, 030 Total 189, 380K.C Distribution Center Only DC to Warehouse Costs Truck Warehouse Freight Costs Kansas City Cleveland Newark Jacksonville Chicago Greenville Memphis Dallas Los Angeles Total Total cost of current system