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March 21st, 2022 
Instructions
| Four Warehouse options have information about the various costs to help make a good economic decision on which is the best choice. Use a formula to calculate each of the yellow boxes on the Warehouse problem page. Note: On variable cost you should use the cost per pallet info to get your final answer. You may use cost per pound to calculate but I would not recommend doing so. At present, the plan is to store 30 million pounds of frozen product in a leased warehouse. Cells B13, D13, F13, and G13 are the final total cost for each option and are in gray. Make sure to show your formulas for full credit. All the information and calculations may or may not be needed to calculate cost as there are multiple ways and formulas to get to the correct answers. All of the yellow and gray highlighted boxes must be populated even if you do not use them in the final calculation. The text box at the bottom should contain a brief explanation of why you chose a specific option. All options have good access to the interstate highway system. Option 4 has a rail dock and the others do not. The hours of operation at Options 1 and 2 are 5 am to 1 am while Options 3 and 4 are open from 5:30 am to 1:30 am. Options 1 and 2 use the same outside freight hauler to make deliveries, Option 4 uses a service that uses special software that allows you to track exactly where the trailer is from the time it leaves the warehouse, and Option 3 operates it's own fleet of trailers. Assume each pallet is stored in the warehouse for 30 days or less. |
Warehouse problem
| Warehouse Problem | See instruction tab for further information | |||||||||||||||||
| Option 1 | Option 2 | Option 3 | Option 4 | |||||||||||||||
| Lease cost | $ 250,000 | $ 100,000 | $ 750,000 | – 0 | ||||||||||||||
| Pallet charge in | 12.00 | 14.00 | – 0 | 20.00 | ||||||||||||||
| Pallet charge out | 12.00 | 12.50 | – 0 | |||||||||||||||
| Pallet storage charge per month | 5.00 | 10.00 | 7.50 | 20.00 | ||||||||||||||
| Freight charge per truck from warehouse to plant | 125.00 | 150.00 | 100.00 | 150.00 | ||||||||||||||
| Miles to plant | 15 | 23 | 8 | 9 | ||||||||||||||
| Variable cost per pallet or | total pounds | lbs per pallet | Pallets per truck | Pallets per year | Trucks per year | trucks per month | trucks per week | |||||||||||
| Variable cost per pound NA | 30,000,000 | 1350 | 20 | |||||||||||||||
| Fixed cost | ||||||||||||||||||
| Total cost | ||||||||||||||||||
| Volume (lbs) | ||||||||||||||||||
| 30,000,000 | ||||||||||||||||||
| Best option at 30 million pounds | ||||||||||||||||||
Why did you select this option?
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