MRO Suppliers W$.$W$.$ Grainger and McMaster$-$Carr sell maintenance, repair, and operations $($MRO$)$ products. Both

companies have catalogs and Web pages through which orders can be placed. W$.$W$.$ Grainger also has several hundred stores throughout the United States. Customers can walk into a store, call in an order, or place it via the Web. W$.$W$.$ Grainger orders are either shipped to the customer or picked up by the customer at one of its stores. McMaster$-$Carr, on the other hand, ships almost all its orders $($though a few customers near its DCs do pick up their own orders$).$ W$.$W$.$ Grainger has nine DCs that both replenish stores and fill customer orders. McMaster has five DCs from which all orders are filled. Neither McMaster nor W$.$W$.$ Grainger manufactures any product. They primarily serve the role of a distributor or retailer. Their success is largely linked to their supply chain management ability. Both firms offer several hundred thousand products to their customers. Grainger stocks about $200,000$ stock$-$keeping units $($SKU$),$ whereas McMaster carries about $500,000.$ Grainger also provides many other products that it does not stock direct from its suppliers. Both firms face the following strategic and operational issues:

$1.$ How many DCs should be built and where should they be located?

$2.$ How should product stocking be managed at the DCs$?$ Should all DCs carry all products?

$3.$ What products should be carried in inventory and what products should be left with the supplier to be shipped directly in response to a customer order?

$4.$ What products should W$.$W$.$ Grainger carry at a store?

$5.$ How should markets be allocated to DCs in terms of order fulfillment? What should be done if an order cannot be completely filled from a DC$?$ Should there be specified backup locations? How should they be selected?

$6.$ How should replenishment of inventory be managed at the various stocking locations?

$7.$ How should Web orders be handled relative to the existing business? Is it better to integrate the Web business with the existing business or to set up separate distribution?

$8.$ What transportation modes should be used for order fulfillment and stock replenishment?