Section I: Introduction (200 words)In general, what are the qualitative pros and cons for domestic sales of having multiple distribution centers and shipping locations in the United States?Section II: Decision-Making Criteria (300 words)The CEO is considering three options with the same total construction and operating costs: expanding the warehouse next to the East Coast manufacturing plant; building a West Coast distribution center; or building a combination manufacturing and warehouse location on the West coast given the following general information, what are at least 5 criteria that must be considered when locating a new or expanded shipping warehouse domestically?The products are primarily medium- and large-size insulated coolers, like you might use for a picnic or trip to the beach. Transportation firms charge by space, or cubic feet, rather than weight, which is the more normal method.
The coolers are made of 3 components, which are all produced by suppliers solely on the East Coast; the raw materials to make this product are bulky, and inbound shipping from the East Coast suppliers currently represents 20% of total raw material costs.
The market is very competitive with generally stable or decreasing marketplace prices.
In states that are warm year-round, sales are pretty steady; in states that have seasons, 90% of sales occur in the MayAugust period.
Right now, to keep West Coast customers happy, the CEO says that they only charge those customers the local freight cost of shipping, which is $200 for anything up to half a truckload.