Shipping Cost from the distribution Centers to the Customer Zones.
Managerial Report
You have been called in to make recommendations for improving the distribution system . Your report should address, but not be limited to, the following issues:
If the company does not change its current distribution strategy, what will its distribution costs be for the following quarter ?
2. Suppose that the company is willing to consider dropping the distribution center limitations; that is, customers could be served by any of the distribution centers. Can costs be reduced? By how much?
3 . The company wants to explore the possibility of satisfying some of the customer demand directly from the production plants. In particular, the shipping cost is $ 0.30 per unit from San Bernardino to Los Angeles and $ 0.70 from San Bernardino to San Diego. The cost for direct shipments from EL Paso to San Antonio is $ 3.50 per unit. Can distribution costs be further reduced by considering these direct plant-customer shipments?
4. Over the next five years, Darby is anticipating moderate growth (5000 meters ) to the North and West. Would you recommend that they consider plant expansion at this time?