There are several possible factors

There are several possible factors

There are several possible factors. An incomplete list includes: Fixed costs associated with each facility, Customer Service (customers prefer several well-stocked facilities nearby), Size and dispersion of sales markets, Efficient interface with manufacturing facilities, Transportation costs (inbound, outbound, and transfer), Handling costs (a product handled more frequently is more likely to be damage), More warehouses generally result in higher average inventory, Labor availability and costs (Table 5 depicts the variability in costs), Environmental factors (legislation, zoning, and public opinion) . This would require fewer outbound shipments, with each in greater quantities for better transportation economies. The potentially longer distances from distribution centers to customer locations might be the only detriment to transportation cost in this scenario (and we cannot tell from the information provided).


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