Question 1: Verify that the current shipment plan does not minimize the total shipment costs and show the improved plan under the current marketing considerations.

Question 2: How much savings are possible with a distribution plan that ignores the established relationships between Istanbul-Antalya and Ankara-Bursa? Show the improved plan.

Question 3: What should be the annual cost of shipping 1 million liters of beer from the Istanbul brewery to the Antalya distribution center, and from the Ankara brewery to the Bursa distribution center so that it becomes optimal for Efes to send beer between these pairs?

Question 4: Is it cost-effective for Efes to import malt in the first year? If not, under what input parameter changes would importing malt possibly become a viable option?

I have the answers I just need them to be "fluffed up" for my report. So increase the sent.ences

ANSWERS:

1. It does not minimize total shipment costs. It costs 11.24 million in existing costs and in the new distribution plan it will cost 9.9 million.

2. You can save 1.39 million

3. It cost $52,000 to ship 1 million liters of beer from the Istanbul brewery to the Antalya distribution center (currently). It will cost $27,000 from Ankara to Bursa (currently). The cost from Istanbul to Antalya needs to be reduced to 38,000 to be feasible. The new shipping cost will have to be $16,000 from Ankara to bursa to be feasible

4. It is not cost-effective because it costs too much money to import. From Istanbul, it costs $32,000 to import and it costs $33,000 to import to Ankara. For Istanbul, if Malt brewing at Afyon were to max out then the most cost-effective option is to import to Istanbul. For Ankara, import cost would need to drop to $16,000 to be cost-effective.