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Logistics case

Stanley received multiple calls from customers complaining about late shipments for both truck and rail delays. Transportation delays were measured in days, not hours. Railcar delivery windows increased from two to seven days, and overall truckload service levels fell to less than 85 percent on time. Due to rise in price of the transportation cost for MAP the cost of goods sold rose from 11 to 19 percent. The transportation problems led to a demand by MAP’s largest domestic customer. Stanley tells that even a 10 percent increase in inventory levels would reduce return on asset levels from 13.7 percent to 9.1 percent. MAP’s inventory investment is 22 percent of total assets and inventory carrying costs are nearing 27 percent…