Cost To Consider:

Safety Stock
Cycle Inventory
Transportation Cost

8 WH 2 WH 1 WH Outssourcing
Investent in Million 10 2.5 1.25 1.25
Data Available: Products
GE EF
Bi-weekly Demand 65.04 19.56
Weekly Demand 32.52 9.78
Standard deviation for biweekly 25.68 13.08
weekly Standard deviaion 18.1585 9.248957
z-value for CSL 99% 2.33
Lead time(L) in weeks 3
Periodic Time review in weeks(P) 2 1
total time(P+L) 5
Safety stock 94.60649 48.18742
Total safety stock 756.8519 385.4994
Average Demand 162.6 48.9
OUL 257.2065 97.08742
Cycle Stock 32.52 9.78 2
Total Cycle Stock 260.16 78.24
Cost of Capital % 14
Unit Cost 3.96 4.56
Cost of Cycle Stock 144.2327 49.94842
Cost of Safety Stock 419.5987 246.1028 3
Total Inventory Cost 859.8826
Transportation Cost Weight 0.125 0.25

Fill Rate(99% SL) 0.01

Bulk shipment Rate 0.4
If Stockout Occurs, Inter WH Transportation
GE EF
Total Biweekly Cost for 8 WH 0.03252 0.01956
Total Biweekly Cost for WH 0.26016 0.15648
total annual cost(1) 6.76416 4.06848

From Waltham to WH
Total amount to Carry 455.28 136.92 (to seven WH)
Total Biweeekly Cost 22.764 13.692
Total Annual Cost 591.864 355.992

Fro WH to Customer
Total amounts to carry 520.32 156.48
total biweekly cost 26.016 15.648
Total Annual Cost 676.416 406.848

total transporation Cost 1275.044 766.9085

total transporation Cost for both products 2041.953
Data Available for 2 WH:-
GE EF
Bi-weekly Demand 260.04 78.24
Weekly Demand 130.02 39.12
Standard deviation for biweekly 45.96 23.4
weekly Standard deviaion 32.49863 16.5463
z-value for CSL 99% 2.33
Lead time(L) in weeks 3
Periodic Time review in weeks(P) 2
total time(P+L) 5
Safety stock 169.3191 86.20685 1
Total safety stock 338.6382 172.4137
Average Demand 650.1 195.6
OUL 819.4191 281.8069
Cycle Stock 130.02 39.12 2
Total Cycle Stock 260.04 78.24 3
Cost of Capital % 14
Unit Cost 3.96 4.56
Cost of Cycle Stock 144.1662 49.94842
Cost of Safety Stock 187.741 110.0689
Total Inventory Cost 491.9245
Trasportation Cost:-
GE EF
Total Demand 520.08 156.48
Demand for 1 WH 65.01 19.56
Deman for central region 130.02 39.12
demand for west region 195.03 58.68
Demand for East region 130.02 39.12
From watham to phoneix
total amounts to carry 260.04 78.24
total cost biweekly 13.002 7.824
total cost anuaaly
Phoenix WH cost for delivery 60.09445 18.08102
Waltham WH cost for delievery 73.66694 22.16467
total cost biweekly 146.7634 48.0697
annual cost 3815.848 1249.812
Annual transportation Cost 5065.66
Data Available for Centralized:
GE EF
Bi-weekly Demand 520.08 156.36
Weekly Demand 260.04 78.18
Standard deviation for biweekly 61.2 31.2
weekly Standard deviaion 43.27494 22.06173
z-value for CSL 99% 2.33
Lead time(L) in weeks 3
Periodic Time review in weeks(P) 2
total time(P+L) 5
Safety stock 225.4641 114.9425
Total safety stock 225.4641 114.9425
Average Demand 1300.2 390.9
OUL 1525.664 505.8425
Cycle Stock 260.04 78.18
Total Cycle Stock 260.04 78.18
Cost of Capital % 14
Unit Cost 3.96 4.56
Cost of Cycle Stock 144.1662 49.91011
Cost of Safety Stock 124.9973 73.37927
Total Inventory Cost 392.4528
Transportion Cost:

GE EF

Bi-weekly Demand 520.08 156.36

Demand for 1 WH 65.01 19.545
Deman for central region 130.02 39.09
demand for west region 195.03 58.635
Demand for East region 130.02 39.09
Total Cost within Region
Total cost for across region 1
Total cost for across region 2
total biweekly cost 0
total annual cost 0
inventory cost
similar to 1 wh

Transportation Cost For Outsourcing:-

Griffin Erlenmeyer
Bulk Shipment to Atlanta
Total Demand 13521.6 4066.8
Bulk Shipment rate 0.4 0.4
Total Costs(A) 676.08 406.68

Delivery Costs from Atlanta

Total Demand 13521.6 4066.8
Demand for one region 2704.32 813.36
Southeast region costs 289.327569230769 174.03818462
Northeast region costs 327.812123076923 197.18766154
Central region costs 385.712307692308 232.01615385
Southwest region costs 424.370215384615 255.26990769
Northwest region costs 443.612492307692 266.84464615
Total Costs(B) 1870.83470769231 1125.3565538

Total Bi-weekly Cost(A+B) 2546.91470769231 1532.0365538

Relative Weight in sales 75.8361474780249 24.163852522

Average Annual Cost 2301.68104731918

Fill Rates
Owned Warehouse Outsourcing
ErlenmeyeGriffin ErlenmeyeGriffin
Unit Price 9.5 8.8 9.5 8.8
Unit Cost 4.56 3.96 3.876 3.366
Gross Margin 4.94 4.84 5.624 5.434
Underage Cost 0.494 0.484 0.5624 0.5434
Overage Cost 0.02736 0.02376 0.023256 0.020196

Fill Rate 0.947522 0.953206 0.960291 0.964166

 Total Inventory in 8 Warehouses 859.88
Total Inventory in 2 Warehouses 491.92
Total Inventory in 1 Warehouses 392.45
For Outsourcing

     Transportation Costs

Transportation with 8 Warehouses 2041.953
Transportation with 2 Warehouses 5065.66
Transportation with 1 Warehouses
Transportation with Outsourcing 2301.68