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 May–August 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.
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