ODS Electronics is an Australian manufacturer of electronics equipment. The company has a single manufacturing facility in Sydney. Australia has seven main regions and so ODS Electronics distributes its products through seven regional warehouses located in Sydney (New South Wales), Brisbane (Queensland), Darwin (Northern Territory), Melbourne (Victoria), Perth (Western Australia), Hobart (Tasmania), and Adelaide (South Australia). Each of these regions is a separate market served by a single regional warehouse. Customers are retail outlets and they receive products directly from the regional warehouse in their region. Each customer is assigned to a single market and receives deliveries only from the one regional warehouse in this state. The regional warehouses receive items directly from the manufacturing facility. Typically, it takes about two weeks to satisfy an order placed by any of the regional warehouses. Over the past five years ODS has been under increasing pressure from competitors. Customers are putting pressure on ODS Electronics to improve the service level and lower costs. To achieve these objectives of improving service levels and lowering costs, ODS Electronics is considering an alternative distribution strategy in which the seven regional warehouses are replaced with a single, central, warehouse that will be in charge of all customer orders. Explain how you would design a new logistics network consisting of only one warehouse.

Explain the strategic advantages and disadvantages of the new suggested distribution strategy compared to the existing strategy.