SCM Presentation 1

SUPPLY CHAIN NETWORK DESIGN
2
FACTORS INFLUENCING DISTRIBUTION NETWORK DESIGN
Distribution network performance evaluated along two dimensions
1. Value provided to the customer
2. Cost of meeting customer needs
Evaluate the impact on customer service and cost for different distribution
network options
Profitability of the delivery network determined by revenue from met
customer needs and network costs
3
FACTORS INFLUENCING DISTRIBUTION NETWORK DESIGN
Elements of customer service Supply chain costs affected by

influenced by network structure: network structure:
Response time Inventories
Product variety
Transportation
Product availability
Facilities and handling
Customer experience
Information
Time to market
Order visibility
Returnability
4
DESIRED RESPONSE TIME & NUMBER OF FACILITIES
5
INVENTORY COSTS AND NUMBER OF FACILITIES
6
TRANSPORTATION COSTS AND NUMBER OF FACILITIES
7
FACILITY COSTS AND NUMBER OF FACILITIES
8
LOGISTICS COST, RESPONSE TIME & NUMBER OF FACILITIES
9
DESIGN OPTIONS FOR A DISTRIBUTION NETWORK
Distribution network choices from the manufacturer to the end consumer
Two key decisions
1. Will product be delivered to the customer location or picked up from a
prearranged site?
2. Will product flow through an intermediary (or intermediate location)?
10
DESIGN OPTIONS FOR A DISTRIBUTION NETWORK
One of six designs may be used
1. Manufacturer storage with direct shipping
2. Manufacturer storage with direct shipping and in-transit merge
3. Distributor storage with carrier delivery
4. Distributor storage with last-mile delivery
5. Manufacturer/distributor storage with customer pickup
6. Retail storage with customer pickup
11
MANUFACTURER STORAGE WITH DIRECT SHIPPING
12
Cost Factor Performance
Inventory Lower costs because of aggregation. Benefits of aggregation are

highest for low-demand, high-value items. Benefits are large if
product customization can be postponed at the manufacturer.
Transportation Higher transportation costs because of increased distance and

disaggregate shipping.
Facilities and handling Lower facility costs because of aggregation. Some saving on
handling costs if manufacturer can manage small shipments or
ship from production line.
Information Significant investment in information infrastructure to integrate

manufacturer and retailer.
13
Service Factor Performance
Response time Long response time of one to two weeks because of increased distance and
two stages for order processing. Response time may vary by product, thus
complicating receiving.
Product variety Easy to provide a high level of variety.
Product availability Easy to provide a high level of product availability because of aggregation
at manufacturer.
Customer experience Good in terms of home delivery but can suffer if order from several
manufacturers is sent as partial shipments.
Time to market Fast, with the product available as soon as the first unit is produced.
Order visibility More difficult but also more important from a customer service
perspective.
Returnability Expensive and difficult to implement.
14
IN-TRANSIT MERGE NETWORK
15
Inventory Similar to drop-shipping.
Transportation Somewhat lower transportation costs than drop-shipping.
Facilities and handling Handling costs higher than drop-shipping at carrier; receiving
costs lower at customer.
Information Investment is somewhat higher than for drop-shipping.
16
Response time Similar to drop-shipping; may be marginally higher.
Product variety Similar to drop-shipping.
Product availability Similar to drop-shipping.
Customer experience Better than drop-shipping because only a single delivery is

received.
Time to market Similar to drop-shipping.
Order visibility Similar to drop-shipping.
Returnability Similar to drop-shipping.
17
DISTRIBUTOR STORAGE WITH CARRIER DELIVERY
18
Inventory Higher than manufacturer storage. Difference is not large

for faster moving items but can be large for very slow-
moving items.
Transportation Lower than manufacturer storage. Reduction is highest for

faster moving items.
Facilities and handling Somewhat higher than manufacturer storage. The

difference can be large for very slow-moving items.
Information Simpler infrastructure compared to manufacturer storage.
19
Response time Faster than manufacturer storage.
Product variety Lower than manufacturer storage.
Product availability Higher cost to provide the same level of availability as manufacturer
storage.
Customer experience Better than manufacturer storage with drop-shipping.
Time to market Higher than manufacturer storage.
Order visibility Easier than manufacturer storage.
Returnability Easier than manufacturer storage.
20
DISTRIBUTOR STORAGE WITH LAST MILE DELIVERY
21
Inventory Higher than distributor storage with package carrier delivery.
Transportation Very high cost given minimal scale economies. Higher than any
other distribution option.
Facilities and handling Facility costs higher than manufacturer storage or distributor
storage with package carrier delivery, but lower than a chain of
retail stores.
Information Similar to distributor storage with package carrier delivery.
22
Response time Very quick. Same day to next-day delivery.
Product variety Somewhat less than distributor storage with package carrier delivery but
larger than retail stores.
Product availability More expensive to provide availability than any other option except
retail stores.
Customer experience Very good, particularly for bulky items.
Time to market Slightly higher than distributor storage with package carrier delivery.
Order visibility Less of an issue and easier to implement than manufacturer storage or
distributor storage with package carrier delivery.
Returnability Easier to implement than other previous options. Harder and more
expensive than a retail network. 23
MANUFACTURER OR DISTRIBUTOR STORAGE WITH CUSTOMER PICKUP
24
Inventory Can match any other option, depending on the location of

inventory.
Transportation Lower than the use of package carriers, especially if using

an existing delivery network.
Facilities and handling Facility costs can be high if new facilities have to be built.
Costs are lower if existing facilities are used. The increase in
handling cost at the pickup site can be significant.
Information Significant investment in infrastructure required.
25
Response time Similar to package carrier delivery with manufacturer or distributor storage.
Same-day delivery possible for items stored locally at pickup site.
Product variety Similar to other manufacturer or distributor storage options.
Product availability Similar to other manufacturer or distributor storage options.
Customer experience Lower than other options because of the lack of home delivery. Experience is
sensitive to capability of pickup location.
Time to market Similar to manufacturer storage options.
Order visibility Difficult but essential.
Returnability Somewhat easier, given that pickup location can handle returns.
26
RETAIL STORAGE WITH CUSTOMER PICKUP
Inventory Higher than all other options.
Transportation Lower than all other options.
Facilities and Higher than other options. The increase in handling

handling cost at the pickup site can be significant for online and
phone orders.
Information Some investment in infrastructure required for online

and phone orders.
27
Response time Same-day (immediate) pickup possible for items stored locally at
pickup site.
Product variety Lower than all other options.
Product availability More expensive to provide than all other options.
Customer experience Related to whether shopping is viewed as a positive or negative
experience by customer.
Time to market Highest among distribution options.
Order visibility Trivial for in-store orders. Difficult, but essential, for online and
phone orders.
Returnability Easier than other options because retail store can provide a
substitute.
28
COMPARATIVE PERFORMANCE OF DELIVERY NETWORK DESIGNS
DELIVERY NETWORKS FOR DIFFERENT PRODUCT/ CUSTOMER CHARACTERISTICS
4-30
THE ROLE OF NETWORK DESIGN
Facility role Factors Influencing Network Design

What role, what processes? Strategic factors
Facility location Technological factors

Where should facilities be located? Macroeconomic factors
Tariffs and tax incentives
Capacity allocation
Exchange-rate and demand risk
How much capacity at each facility?
Freight and fuel costs
Market and supply allocation Political
What markets? Which supply sources?
Infrastructure factors
Competitive factors
Revisit design decisions after market Positive externalities between firms
changes, mergers, or factor cost changes! Locating to split the market
Customer response time and local presence

Logistics and facility costs
31
FRAMEWORK FOR NETWORK DESIGN DECISIONS
32
MODELS FOR FACILITY LOCATION & CAPACITY ALLOCATION INFORMATION
REQUIRED
o Location of supply sources and markets
o Location of potential facility sites
o Demand forecast by market
o Facility, labor, and material costs by site
o Transportation costs between each pair of sites
o Inventory costs by site and as a function of quantity
o Sale price of product in different regions
o Taxes and tariffs
o Desired response time and other service factors
33
NETWORK OPTIMIZATION MODELS
34
CAPACITATED PLANT LOCATION MODEL
n = number of potential plant locations/capacity
m = number of markets or demand points yi = 1 if plant i is open, 0 otherwise
D j = annual demand from market j xij = quantity shipped from plant
i to market j
K i = potential capacity of plant i
f i = annualized fixed cost of keeping plant i open
cij = cost of producing and shipping one unit from plant i to market j (cost
includes production, inventory, transportation, and tariffs)
n n m
Min f i yi + c x ij ij
i=1 i=1 j=1
subject to
n
x ij
= D j for j = 1,...,m
i=1
m
x ij
= K i yi for i = 1,...,n
j=1
yi {0,1} for i = 1,...,n, x ij 0 35

36
37
38
Constraints
39
40
41
GRAVITY LOCATION MODEL
xn, yn: coordinate location of either a market or supply source

n
Fn: cost of shipping one unit for one mile between the
facility and either market or supply source n
Dn: quantity to be shipped between facility and market or
supply source n
(x, y) is the location selected for the facility, the distance dn between
the facility at location (x, y) and the supply source or market n is
given by
(x x ) + ( y y )
2 2
dn = n n
42
Transportation Quantity in Coordinates

Sources/Markets Cost $/Ton Mile (Fn) Tons (Dn) xn yn
Supply sources
Buffalo 0.90 500 700 1,200
Memphis 0.95 300 250 600
St. Louis 0.85 700 225 825
Markets
Atlanta 1.50 225 600 500
Boston 1.50 150 1,050 1,200
Jacksonville 1.50 250 800 300
Philadelphia 1.50 175 925 975
New York 1.50 300 1,000 1,080
k
Total transportation cost TC = d D Fn n n
n=1
43
44
45
1. For each supply source or market n, evaluate dn

2. Obtain a new location (x, y) for the facility, where
k k
Dn Fn xn Dn Fn yn
d d
x = n=1
k
n
and y = n=1
k
n
Dn Fn Dn Fn
d d
n=1 n n=1 n
3. If the new location (x , y ) is almost the same as

(x, y) stop. Otherwise, set (x, y) = (x , y ) and go
to step 1
46
NETWORK OPTIMIZATION MODEL
Demand City
Monthly Monthly
Production and Transportation
Capacity Fixed Cost
Cost per Thousand Units (Thousand $)
(Thousand (Thousand
Supply City Atlanta Boston Chicago Denver Omaha Portland Units) K $) f
Baltimore 1,675 400 985 1,630 1,160 2,800 18 7,650
Cheyenne 1,460 1,940 970 100 495 1,200 24 3,500
Salt Lake 1,925 2,400 1,450 500 950 800 27 5,000
City
Memphis 380 1,355 543 1,045 665 2,321 22 4,100
Wichita 922 1,646 700 508 311 1,797 31 2,200
Monthly 10 8 14 6 7 11
demand
(thousand
units) Dj
47
Allocating demand to production facilities
n = number of factory locations

m = number of markets or demand points xij = quantity shipped from
D j = annual demand from market j factory i to market j
K i = capacity of factory i
cij = cost of producing and shipping one unit from factory i to
market j
n m subject to
Min cij xij
n
i=1 j=1 x = D j for j = 1,..., m
ij
i=1
m
x ij Ki for i = 1,..., n
j=1
48
Optimal Demand Allocation
Atlanta Boston Chicago Denver Omaha Portland
TelecomOne Baltimore 0 8 2
Memphis 10 0 12
Wichita 0 0 0
HighOptic Salt Lake 0 0 11
Cheyenne 6 7 0
49
NETWORK OPTIMIZATION MODEL CAPACITATED PLANT LOCATION
Merge the companies
Solve using location-specific costs
yi = 1 if factory i is open, 0 otherwise

xij = quantity shipped from factory i to market j
n n m
Min f i yi + c x ij ij
i=1 i=1 j=1
50
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52
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54
55
CAPACITATED MODEL WITH SINGLE SOURCING
Market supplied by only one factory

Modify decision variables
yi = 1 if factory i is open, 0 otherwise

xij = 1 if market j is supplied by factory i, 0 otherwise
n n m
Min f i yi + D j cij xij
i=1 i=1 j=1
subject to
x ij = 1 for j = 1,..., m
i=1
m
D x j ij K i yi for i = 1,..., n
j=1
xij , yi {0,1}
56
CAPACITATED MODEL WITH SINGLE SOURCING
Optimal network configuration with single sourcing
Open/
Closed Atlanta Boston Chicago Denver Omaha Portland
Baltimore Closed 0 0 0 0 0 0
Cheyenne Closed 0 0 0 0 0 0
Salt Lake Open 0 0 0 6 0 11
Memphis Open 10 8 0 0 0 0
Wichita Open 0 0 14 0 7 0
57
LOCATING PLANTS AND WAREHOUSES SIMULTANEOUSLY
58
Model inputs
m = number of markets or demand points

n = number of potential factory locations
l = number of suppliers
t = number of potential warehouse locations
Dj = annual demand from customer j
Ki = potential capacity of factory at site i
Sh = supply capacity at supplier h
We = potential warehouse capacity at site e
Fi = fixed cost of locating a plant at site i
fe = fixed cost of locating a warehouse at site e
chi = cost of shipping one unit from supply source h to factory i
cie = cost of producing and shipping one unit from factory i to
warehouse e
cej = cost of shipping one unit from warehouse e to customer j
59
Goal is to identify plant and warehouse locations and quantities

shipped that minimize the total fixed and variable costs
yi = 1 if factory is located at site i, 0 otherwise

ye = 1 if warehouse is located at site e, 0 otherwise
xej = quantity shipped from warehouse e to market j
xie = quantity shipped from factory at site i to warehouse e
xhi = quantity shipped from supplier h to factory at site i
n t l n n t t m
Min Fi yi + fe ye + chi xhi + cie xie + cej xej
i=1 e=1 h=1 i=1 i=1 e=1 e=1 j=1
60
subject to
n m
x hi
Sh for h = 1,...,l x ej
We ye for e = 1,...,t
i=1 j=1
l t t
x hi
xie 0 for i = 1,...,n x ej
= D j for j = 1,...,m
h=1 e=1 e=1
t
x ie
Ki yi for i = 1,...,n yi , ye {0,1},xej ,xie ,xhi 0
e=1
n m
x xie ej
0 for e = 1,...,t
i=1 j=1
61
ACCOUNTING FOR TAXES, TARIFFS, AND CUSTOMER REQUIREMENTS
A supply chain network should maximize profits after tariffs and
taxes while meeting customer service requirements
Modified objective and constraint
m n n n m
Max rj xij Fi yi cij xij
j=1 i=1 i=1 i=1 j=1
x ij
D j for j = 1,...,m
i=1
62
INVENTORY MANAGEMENT
63
ROLE OF CYCLE INVENTORY IN A SUPPLY CHAIN
Lot or batch size is the quantity that a Cycle inventory =

lot size Q
=
stage of a supply chain either 2 2
produces or purchases at a time
Cycle inventory is the average average inventory
inventory in a supply chain due to Average flow time =
average flow rate
either production or purchases in lot
sizes that are larger than those
demanded by the customer Average flow time cycle inventory Q
= =
Q: Quantity in a lot or batch size resulting from demand 2D
cycle inventory
D: Demand per unit time
What is the flow time for lot sizes of 1,000 and daily demand of 100?
64
ROLE OF CYCLE INVENTORY IN A SUPPLY CHAIN
Primary role of cycle inventory is to allow
different stages to purchase product in lot
Lower cycle inventory has sizes that minimize the sum of material,
Shorter average flow time ordering, and holding costs
Lower working capital requirements
Ideally, cycle inventory decisions should
Lower inventory holding costs
consider costs across the entire supply
Cycle inventory is held to chain
Take advantage of economies of scale
Reduce costs in the supply chain In practice, each stage generally makes its
own supply chain decisions
Increases total cycle inventory and total
costs in the supply chain
Cycle inventory exists in a supply chain because different stages

exploit economies of scale to lower total cost. The costs considered
include material cost, fixed ordering cost, and holding cost.
65
LOT SIZING FOR A SINGLE PRODUCT THE EOQ MODEL
Economic Order Quantity
2DS
Optimal lot size, Q* =
hC
Optimal ordering frequency
D DhC
n* = =
Q* 2S
Annual demand, D = 1,000 x 12 = 12,000 units
Order cost per lot, S = $4,000 Determine (a) EOQ (b) Cycle Inventory
(c) No. of order per year (d) Total cost
Unit cost per computer, C = $500
(e) Average flow time
Holding cost per year as a fraction of unit cost, h = 0.2
What happens if the lot size is
66
reduced to 200?
PRODUCTION LOT SIZING THE EPQ MODEL
The entire lot does not arrive at the same time

Production occurs at a specified rate P
Inventory builds up at a rate of P D
2DS
Q =P
(1 D / P)hC
Annual setup cost Annual holding cost
D QP
P S (1 D / P) hC
Q 2
67
LOT SIZING WITH MULTIPLE PRODUCTS OR CUSTOMERS
1. Each product manager orders his or her model independently
2. The product managers jointly order every product in each lot
3. Product managers order jointly but not every order contains

every product; that is, each lot contains a selected subset of the
products
68
MULTIPLE PRODUCTS ORDERED & DELIVERED INDEPENDENTLY
Demand
DL = 12,000/yr, DM = 1,200/yr, DH = 120/yr
Common order cost
S = $4,000
Product-specific order cost What is the total cost for the system?
sL = $1,000, sM = $1,000, sH = $1,000
Holding cost
h = 0.2
Unit cost
CL = $500, CM = $500, CH = $500
69
MULTIPLE PRODUCTS ORDERED & DELIVERED INDEPENDENTLY
Litepro Medpro Heavypro
Demand per year 12,000 1,200 120
Fixed cost/order $5,000 $5,000 $5,000
Optimal order size 1,095 346 110
Cycle inventory 548 173 55
Annual holding cost $54,772 $17,321 $5,477
Order frequency 11.0/year 3.5/year 1.1/year
Annual ordering cost $54,772 $17,321 $5,477
Average flow time 2.4 weeks 7.5 weeks 23.7 weeks
Annual cost $109,544 $34,642 $10,954
Total annual cost = $155,140

70
LOTS ORDERED AND DELIVERED JOINTLY
S* = S + sL + sM + sH Annual order cost = S * n
DL hC L DM hCM DH hC H
Annual holding cost = + +
2n 2n 2n
DL hC L DM hCM DH hC H
Total annual cost = + + +S*n
2n 2n 2n

k
DL hC L + DM hCM + DH hC H Di hCi
n* = n* = i=1
2S * 2S *
71
PRODUCTS ORDERED AND DELIVERED JOINTLY
S* = S + sA + sB + sC = $7,000 per order
12,000 100 +1,200 100 +120 100

n* = = 9.75
2 7,000
Annual order cost = 9.75 x 7,000 = $68,250
Annual ordering
and holding cost = $61,512 + $6,151 + $615 + $68,250
= $136,528
72
PRODUCTS ORDERED AND DELIVERED JOINTLY
Demand per year (D) 12,000 1,200 120
Order frequency (n) 9.75/year 9.75/year 9.75/year
Optimal order size (D/n) 1,230 123 12.3
Cycle inventory 615 61.5 6.15
Annual holding cost $61,512 $6,151 $615
73
AGGREGATION WITH CAPACITY CONSTRAINT
Demand per product, Di = 10,000

Holding cost, h = 0.2
Unit cost per product, Ci = $50
Common order cost, S = $500
Supplier-specific order cost, si = $100
74
AGGREGATION WITH CAPACITY CONSTRAINT
Total required capacity per truck = 4 x 671 =
2,684 units
S* = S + s1 + s2 + s3 + s4 = $900 per order
Truck capacity = 2,500 units

4
D1hC1 4 10,000 0.2 50
n* = i=1
= = 14.91 Order quantity from each supplier = 2,500/4 =
2S * 2 900
625
900
Annual order cost = 14.91 = $3,355
4 Order frequency increased to 10,000/625 = 16
Annual holding cost hCi Q 671
per supplier = = 0.2 50 = $3,355 Annual order cost per supplier increases to
2 2
$3,600
Annual holding cost per supplier decreases to

$3,125
75
LOTS ORDERED AND DELIVERED JOINTLY FOR A SELECTED SUBSET
Step 1: Identify the most frequently ordered hCi Di
product assuming each product is ni =
ordered independently 2(S + si )
hCi Di
Step 2: For all products i i*, evaluate the ordering frequency ni =
2si
Step 3: For all i i*, evaluate the frequency of product i relative to the most frequently ordered
product i* to be mi
mi = n ni

l
hCi mi D
Step 4: Recalculate the ordering frequency of the most n =
i=1
frequently ordered product i* to be n (2 S + )

i=1 si / mi
l
Step 5: Evaluate an order frequency of ni = n/mi and the total l l D

cost of such an ordering policy TC = nS + ni si + i hC1
i=1 i-1 2ni
Tailored Aggregation: Higher-demand products ordered more

frequently and lower-demand products ordered less frequently
76
Applying Step 1
hC L DL hCM DM hC H DH n = 11.0
nL = = 11.0 nM = = 3.5 nL = = 1.1
2(S + sL ) 2(S + sM ) 2(S + sH )
Applying Step 2 hCM DM hC H DH

nM = = 7.7 and nH = = 2.4
2sM 2sH
Applying Step 3
n 11.0 n 11.0
mM = = = 2 and mH = = = 5
nM 7.7 nH 2.4
Applying Step 4
n = 11.47
Applying Step 5 nL = 11.47 / yr nM = 11.47 / 2 = 5.74 / yr nH = 11.47 / 5 = 2.29 / yr
Annual Order Cost: nS + nL sL + nM sM + nH sH = $65,383.5 77

Demand per year (D) 12,000 1,200 120
Order frequency (n) 11.47/year 5.74/year 2.29/year
Optimal order size (D/n) 1,046 209 52
Cycle inventory 523 104.5 26
Annual holding cost $52,307 $10,461 $2,615

Annual ordering and holding cost = $130,767
A key to reducing cycle inventory is the reduction of lot size. A key to reducing lot size
without increasing costs is reducing the fixed cost associated with each lot. This may be
achieved by reducing the fixed cost itself or by aggregating lots across multiple products,
customers, or suppliers. When aggregating across multiple products, customers, or
suppliers, simple aggregation is effective when product-specific order costs are small,
and tailored aggregation is best if product-specific order costs are large. 78

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SUPPLY CHAIN NETWORK DESIGN

Distribution network performance evaluated along two dimensions

1. Value provided to the customer

2. Cost of meeting customer needs

Profitability of the delivery network determined by revenue from met

customer needs and network costs

Elements of customer service Supply chain costs affected by

Distribution network choices from the manufacturer to the end consumer

Two key decisions

1. Will product be delivered to the customer location or picked up from a

2. Will product flow through an intermediary (or intermediate location)?

One of six designs may be used

1. Manufacturer storage with direct shipping

2. Manufacturer storage with direct shipping and in-transit merge

3. Distributor storage with carrier delivery

4. Distributor storage with last-mile delivery

5. Manufacturer/distributor storage with customer pickup

6. Retail storage with customer pickup

Cost Factor Performance

Inventory Lower costs because of aggregation. Benefits of aggregation are

Transportation Higher transportation costs because of increased distance and

Information Significant investment in information infrastructure to integrate

Cost Factor Performance

Inventory Similar to drop-shipping.

Transportation Somewhat lower transportation costs than drop-shipping.

Information Investment is somewhat higher than for drop-shipping.

Service Factor Performance

Response time Similar to drop-shipping; may be marginally higher.

Product variety Similar to drop-shipping.

Product availability Similar to drop-shipping.

Customer experience Better than drop-shipping because only a single delivery is

Time to market Similar to drop-shipping.

Order visibility Similar to drop-shipping.

Returnability Similar to drop-shipping.

Cost Factor Performance

Inventory Higher than manufacturer storage. Difference is not large

Transportation Lower than manufacturer storage. Reduction is highest for

Facilities and handling Somewhat higher than manufacturer storage. The

Information Simpler infrastructure compared to manufacturer storage.

Service Factor Performance

Response time Faster than manufacturer storage.

Product variety Lower than manufacturer storage.

Customer experience Better than manufacturer storage with drop-shipping.

Time to market Higher than manufacturer storage.

Order visibility Easier than manufacturer storage.

Returnability Easier than manufacturer storage.

Cost Factor Performance

Inventory Higher than distributor storage with package carrier delivery.

Information Similar to distributor storage with package carrier delivery.

Response time Very quick. Same day to next-day delivery.

Customer experience Very good, particularly for bulky items.

Cost Factor Performance

Inventory Can match any other option, depending on the location of

Transportation Lower than the use of package carriers, especially if using

Information Significant investment in infrastructure required.

Service Factor Performance

Product variety Similar to other manufacturer or distributor storage options.

Product availability Similar to other manufacturer or distributor storage options.

Time to market Similar to manufacturer storage options.

Order visibility Difficult but essential.

Cost Factor Performance

Inventory Higher than all other options.

Transportation Lower than all other options.

Facilities and Higher than other options. The increase in handling