To an additional annual cost of $200,000$ euros. Flexible Study Questions warehouses, however, could be used to serve demand for both wireless and satellite products. What is the annual cost if Lightning uses the current network $($with warehouses specialized as in Table $5-17)$ optimally to meet European demand? In the longer term, Simone had to decide whether to restructure the distribution network. She could choose to close some warehouses, leave others open as they were, or double the capacity of some warehouses, doubling the capacity of the warehouse would increase its annual fixed cost by $80$ percent. Thus, if the capacity of the Madrid warehouse was doubled, its annual fixed cost would be $900,000$ euros. What supply chain network configuration do you recommend for the long term if demand is as in Table $5-16?$ Should any warehouses be closed? Should any warehouses have their capacity doubled? Closing a warehouse would also incur some cost, thus reducing the annual fixed cost that could be saved. The Simone team estimated that closing a warehouse would save $80$ percent of the annual fixed cost. Thus, closing the Madrid warehouse would still result in an annual cost of $100,000$ euros because only $80$ percent of the fixed cost is saved.