***PLEASE SEE ATTACHMENTS FOR CASE DETAILS***
Distribution within a supply chain is often constrained by many factors including, but not limited to infrastructure, labor quality, suppliers, free trade zones, political risk, governmental barriers, trade blocs, and environmental regulations. Developing cost beneficial product distribution solutions is critical to a companys success. Wal-Mart, for example, does not have warehouses that store inventory. Rather, Wal-Mart has distribution centers strategically located throughout the globe to lower logistics, distribution and transportation costs.
Read the case on W.W. Grainger, Inc. Analytics Exercise: Distribution Center Location found at the end of Chapter 15 in your text, Operations and Supply Chain Management. After you have thoroughly read through the case, answer the questions listed below. Your answers must be detailed and thorough, addressing the questions completely. It is acceptable to list the questions numerically in your response.
Calculate the current cost of operating the existing distribution system.
Synthesize at least one change that could be made that would lower costs in the distribution system.
Assuming no constraints, what would you do to optimize the distribution and lower costs to operate the current system?
Consider if anything has been overlooked by Grainger then approach this from a strategic perspective and provide recommendations for cost effective improvements.