Course name :Supply Chain Management Strategy
What will the total costs for Gadget.com be in 2019, 2020 and 2021 under each of the following options?
Keeping the existing small warehouse in St. Louis with additional warehouse(s) all rented in St. Louis as well;
Keeping the existing small warehouse in St. Louis with additional warehouse(s) all rented in other cities, i.e., in St. Louis there is only one small warehouse; and
Not keeping any warehouse in St. Louis with new warehouses all rented in other cities.
Based on the findings of Q1, which option would you recommend to Gadget.com for the next three years from 2019 up to 2021 entirely from a cost saving perspective?
If Gadget.com decides that there is no need to adopt the lowest cost option if there is strong justification for using another option, will you change your recommendation? If yes, which option will you recommend and why? Support your argument with a good discussion using some relevant references.
To simplify administrative work, Gadget.com is thinking of not charging a shipment fee from customers but asking them to pay the shipment charges directly to UPS based on origin and destination using the rates shown in Table 4. In other words, shipment cost will be totally borne by the customers. With this idea in mind, will you change your recommendation in Q2? If yes, which option will you recommend and what will the supply
