Discuss the quantitative factors that may affect the option we are to choose. Use this template to show your numeric calculations. Without calculations shown for how you reached your conclusion, section V will earn 0 points. Fill out the Excel template attached. Discuss your findings. You must attach the table to your paper in Appendix or as a separate file to get the credit for this part. Additional data for your recommendation is below:
- The products are primarily medium- and large-size insulated coolers, like you might use for a picnic or trip to the beach. Each cooler occupies 2 cubic feet of trailer truck space; trailers are 10 x 10 x 40’ long and cost $1,000 to ship from the East Coast to the West Coast.
- Based on this information, the added freight cost to get raw materials to a West Coast manufacturing location would be $0.20, $0.20, and $0.60 per finished-good unit, respectively.
- The mass merchandiser location on the West Coast will be purchasing 10,000 units per week, but in lots of only 1,000 at a time because of their retail store space constraints.
- The raw materials to make this product are bulky, and inbound shipping from the suppliers to the manufacturing plant represents 20% of total raw material costs. These raw materials are supplied in the United States from the East Coast; they are not available elsewhere.
- In the past, to keep West Coast customers happy, the CEO agreed to freight equalize customer shipping charges to be competitive with West Coast competition. She says that they only charge those customers the local freight cost of shipping, which is $200 per delivery for anything up to half-truckload quantities.
Section VI: Conclusion (200 words)
What is your conclusion based on what you have discussed in the paper. What option do you recommend the company to pursue? What are the most important points that you want the CEO to understand about this entire decision-making process?