In a recent Wall Street Journal article (The Price You Pay for Water at the Airport, Scott McCartney, April 22, 2015), the cost of a bottle at various airports was compared to the cost of that same bottle of water at a convenience store. A 20-ounce bottle of Dasani water typically costs about $0.99 at a convenience store. At the JFK International airport in New York City, that bottle of Dasani water is $2.89. An airport store operator interviewed for the WSJ story stated that the costs of operating airport shops are more expensive than other retail stores because:

- Off-airport warehouses are needed due to limited inventory space

- Deliveries to stores are usually made during off-peak hours

- Deliveries are made in small batches so that everything can go through airport security screening

1. Is the cost of an off-airport warehouse considered to be a unit-level, batch-level, product-level, or facility-level cost as it relates to:

   1. The airport store

   2. An individual bottle of water

2. Describe the costs that could be incurred in a small batch delivery of two cases of Dasani water to the store inside the airport from the off-airport warehouse?

3. How does the constraint that the deliveries must be made during off-peak hours impact the cost of the deliveries?

4. Are the costs of a delivery of two cases of Dasani water to the store inside the airport from the off-airport warehouse considered to be unit-level, batch-level, product-level, or facility-level costs as they relates to (consider each cost you listed in question 2 above separately):

   1. The airport store

   2. An individual bottle of water