Manufacturing Company serves the global Energy, Power Generation and Chemical markets to provide innovative solu- tions for industrial heating applications. The vice president of the supply chain is looking to setup plants that meet demand in its five demand regions and is considering different options. One possibility is to setup up a facility in each of his sales re- gions. An alternative approach is to consolidate plants in just a few regions. The following table shows demand for each region and varia- ble costs, which include production, inventory, and transpor- tation costs for manufacturing one million products. is consid- ering two different plant sizes. Fixed costs to build plants in Another factor for to consider in choosing the location(s) of their manufacturing plants is the interaction with two of its main suppliers. Suppliers offer an all-units transportation cost discount depending on the volume of product sent to the plants. Table 2. Suppliers Transportation Cost Supplier 1 Quantity Cost (millions of units) (per million units) 0-10 $40 More than 10 $36 Supplier 2 Quantity Cost (millions of units) (per million units) 0-15 $45 More than 15 $30 Sources Transportation Cost ($/1,000,000 units/mile) Demand Region Production & Transportation cost per 1,000,000 units Plants Region DCW DCMW DCNE DCSE DCSW Fixed Cost Fixed Cost Suppliers 1 Location Uvalde, Texas Capacity (millions of units) Dependent on volume Dependent on volume 2 West Midwest Northeast South Central South West Demand (millions of units) Steele, North Dakota 81 117 102 115 142 12 82 77 105 125 100 8 101 108 95 90 103 14 130 98 119 59 105 16 High Capacity (millions of units) 20 20 20 20 20 116 100 111 74 71 7 60,000 45,000 85.000 41,000 40,000 150,000 100,000 140,000 90,000 100,000 DCs DCW DCMW DCNE DCSE DCSW Chico, California Stapleton, Nebraska Buffalo, New York Huntsville, Alabama Prescott, Arizona S60 $35 $50 $40 $55 each one of the regions and their corresponding capacities are also shown. The assumption is that variable costs grow line- arly with the quantity shipped or produced. All the costs are in USD. Table 1. Fixed and Variables Cost and Capacity Limits for Plants a. One of critical raw material is distributed to the Midwest's plant (see question d). Evaluate inventory replenishment options for this item that is shipped by truck in a TL fash- ion. Assume's demand follows a normal distribution with mean 1000 units/day and standard deviation of 100 units