Question 2 (16 marks) For the logistic network design of a company, a system analysis approach is often used to identify the least- total-cost for the combined facility network, as shown in the figure below. Total cost Cost P Inventory cost Warehousing cost Transportation cost Number of warehouses a. Describe the factors why the inventory/warehousing cost increases with the number of warehouses increasing, but the transportation cost decreases firstly and then increases? b. In an Assembly-To-Order model or a Make-to-Order business model, which type of cost influences its inventory/warehousing/transportation cost most respectively? Use an example to explain the main reasons. c. Based on your own understanding, what actions can be done to make the least-total-cost point (P) move to the right? Explain. Rubrics and Marking: The total marks of Question 2 are 16. The distribution of marks is: Part a: Totally 6 marks, 2 marks each for describing the core factors. Part b: Totally 7 marks for using a most relevant example and giving the correct answer with appropriate explanation. Part c: Totally 3 marks for illustrating the core actions to be taken. Question 2 (16 marks) For the logistic network design of a company, a system analysis approach is often used to identify the least- total-cost for the combined facility network, as shown in the figure below. Total cost Cost P Inventory cost Warehousing cost Transportation cost Number of warehouses a. Describe the factors why the inventory/warehousing cost increases with the number of warehouses increasing, but the transportation cost decreases firstly and then increases? b. In an Assembly-To-Order model or a Make-to-Order business model, which type of cost influences its inventory/warehousing/transportation cost most respectively? Use an example to explain the main reasons. c. Based on your own understanding, what actions can be done to make the least-total-cost point (P) move to the right? Explain. Rubrics and Marking: The total marks of Question 2 are 16. The distribution of marks is: Part a: Totally 6 marks, 2 marks each for describing the core factors. Part b: Totally 7 marks for using a most relevant example and giving the correct answer with appropriate explanation. Part c: Totally 3 marks for illustrating the core actions to be taken