OPM 4150 Module 1 Written Assignment: Total Cost of One Warehouse or Two Example

Reviewed by Edgar Pennington, MBA Thomas Edison State University Updated October 2026

This OPM 4150 Module 1 sample answers a written assignment on the logistics system in Logistics, a course in TESU's Bachelor of Science in Business Administration in Operations Management. OPM-4150 opens with logistics as a system: transportation, warehousing, inventory, order processing and customer service, managed together rather than one at a time. Its written assignments ask students to explain and apply each module's ideas. The paper applies the total cost concept to a composite restaurant supply distributor in Paulsboro, New Jersey, which serves 2,300 restaurants across the mid-Atlantic from one warehouse. It compares the current network with a two-warehouse network, shows how the cost components trade off and explains why the lower total cost and better service favor a second warehouse.

CourseOPM-4150 Logistics
ModuleModule 1
Paper typeModule 1 written assignment: the logistics system
LengthAbout 590 words, 5 pages
FormatAPA 7 student paper
SchoolThomas Edison State University
ProgramB.S.B.A. in Operations Management
UpdatedOctober 2026

Free sample paper for OPM 4150 Module 1

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One Warehouse or Two? The Total Cost Concept at a Restaurant Supply Distributor

Student Name

B.S.B.A. in Operations Management, Thomas Edison State University

OPM-4150: Logistics

Mentor Name

Month Day, Year

What this page is doingThe title poses the network decision that the total cost analysis answers.
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One Warehouse or Two? The Total Cost Concept at a Restaurant Supply Distributor

Logistics as a System

Gourdin (2006) presents logistics as a set of interrelated activities, transportation, inventory, warehousing, order processing and customer service, whose costs and performance depend on one another. Managing them separately leads to decisions that lower one cost while raising others. The total cost concept holds that the right logistics decision is the one that minimizes the combined cost of all activities for a given level of customer service, not the one that minimizes any single cost.

Bowersox et al. (2013) describe the same idea as integrated logistics: a firm's logistics performance comes from the coordination of its network design, information, transportation, inventory and warehousing, and trade-offs among these are the central problem of logistics management.

The Decision

Our customers, independent restaurants and small chains, order kitchen supplies, disposables and small equipment, and most want next-day delivery. From Paulsboro, we reach 71 percent of customers by the next morning; restaurants in central Pennsylvania and western Maryland wait two or three days, and some buy from competitors instead. Losing those customers matters beyond their own orders: chains that operate in both states prefer one supplier for all their locations, so slow service in Pennsylvania puts our New Jersey business with those chains at risk too. Management must decide whether a second warehouse in Harrisburg, Pennsylvania, is worth adding.

Total Cost Comparison

The components move in opposite directions. A second warehouse adds $500,000 in warehousing costs and $250,000 in inventory carrying cost, because each warehouse must hold safety stock; Coyle et al. (2017) describe the square root rule, under which splitting inventory between two locations raises total safety stock by roughly 40 percent, and our estimate of a 28 percent rise in average inventory reflects that, softened by lower cycle stock at each site. Against those increases, transportation falls $600,000, because trucks travel shorter distances, and lost sales fall $250,000.

The total cost of the two-warehouse network is $100,000 lower, and service improves sharply. A decision based only on warehousing cost would have rejected Harrisburg; a decision based only on transportation would have overstated its benefit.

Cost componentOne warehouse (Paulsboro)Two warehouses (Paulsboro and Harrisburg)
Transportation$2,900,000$2,300,000
Warehousing$1,100,000$1,600,000
Inventory carrying (25 percent of average inventory)$900,000$1,150,000
Lost sales from slow delivery (estimated margin)$400,000$150,000
Total$5,300,000$5,200,000
Customers reached next day71 percent94 percent
What this page is doingShowing that warehousing and inventory costs rise while transportation and lost sales fall makes the trade-off visible, which is the point of the total cost concept.
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Logistics and Strategy

Gourdin emphasizes that logistics can be a source of competitive advantage when it supports what customers value. For restaurants, which keep little storage space and run out of supplies quickly, next-day delivery is an order winner. The second warehouse would let the distributor compete for customers it now loses on speed. Speed also supports the growth plan, since the owners want 40 percent more sales within three years, most of it from the regions now served slowly.

Risks and Assumptions

The lost sales estimate is the least certain figure: it assumes that half of the customers lost to competitors in Pennsylvania would return with next-day service. If only a quarter returned, the two networks would cost about the same, and the decision would rest on growth plans. The analysis also assumes stable fuel prices; higher fuel costs would favor the two-warehouse network further.

Conclusion

The total cost concept shows that the second warehouse lowers combined logistics costs slightly while raising next-day coverage from 71 to 94 percent. The case for Harrisburg rests on the system as a whole, not on any single cost.

References

Bowersox, D. J., Closs, D. J., Cooper, M. B., & Bowersox, J. C. (2013). Supply chain logistics management (4th ed.). McGraw-Hill.

Coyle, J. J., Langley, C. J., Novack, R. A., & Gibson, B. J. (2017). Supply chain management: A logistics perspective (10th ed.). Cengage Learning.

Gourdin, K. N. (2006). Global logistics management: A competitive advantage for the 21st century (2nd ed.). Blackwell.

OPM 4150 Module 1 instructions, in plain terms

Across its five modules, OPM-4150 sets fifteen written assignments carrying 30 percent of the grade, along with five forums, a proctored midterm and a final project delivered in two parts. Each written assignment focuses on a concept and asks you to explain and apply it in your own words. This one covers the logistics system and the total cost concept. You will show how logistics activities trade off, compare options on total cost and service and say what the comparison means for strategy. Draw mainly on the textbook, adding outside sources where they strengthen the answer. Use a table to set the cost components side by side for each alternative, and add customer service as a row, since the total cost concept compares costs at a stated level of service.

Inside the OPM 4150 Module 1 example

The paper explains logistics as a system and the total cost concept, with a second source on integrated logistics. It sets out the network decision, then a table compares four cost components and next-day coverage for two networks. The text explains why components move in opposite directions, citing research on inventory centralization. Later sections tie the decision to strategy and flag the assumptions that could flip it, and the conclusion returns to the systems view. The section on risks names the lost sales estimate as the least certain figure and shows how a smaller estimate would change the answer, which keeps the recommendation honest. Both networks are compared at their stated service levels.

OPM 4150 Module 1 rubric: what earns full marks

Credit goes to accurate explanation of concepts, correct application, sound reasoning and clear prose in your own words. Papers that show cost components trading off, rather than a single cost falling, demonstrate the total cost concept. Including customer service alongside cost shows the full logistics view. Naming the least certain assumption, and how it would change the decision, shows analytical honesty. A recommendation that states how it depends on uncertain estimates, such as lost sales, shows mature judgment. Linking the network choice to what restaurants value connects logistics to strategy, as the textbook asks. Clear tables and plain prose in the student's own words complete a strong answer.

OPM 4150 Module 1 help from the desk

Students lose points by comparing alternatives on one cost, by ignoring customer service or by copying textbook definitions without applying them. Others present totals without showing the components. Show each cost component for each alternative. Explain why each moves as it does. Include service, not only cost. Identify the assumption that matters most. Say which estimate is least certain and how the answer would change if it were wrong, and connect the decision to what customers care about. Keep the systems view throughout: every change in one activity ripples into the rest. A free first sample on your own OPM-4150 written assignment is available on request.

Write yours, or have the desk draft it

This paper is an original model document written by our desk, not a submitted student paper and not an official Thomas Edison State University document. Read it for the moves, then write your own to the instructions in your classroom. If you want one built to your exact prompt and rubric, the first custom sample is free and arrives in 24 to 48 hours.

More OPM 4150 and B.S.B.A. in Operations Management sample papers

OPM 4150 Module 1 questions, answered

Where can I find a free OPM 4150 Module 1 sample paper?

A restaurant supply distributor's total cost comparison of one warehouse and two is the assignment above.

What is the total cost concept in logistics?

The idea that logistics decisions should minimize the combined cost of all activities for a given service level, not any single cost.

Why does adding a warehouse raise inventory costs?

Each location must hold its own safety stock, so total inventory rises when stock is split among more sites.

What is the square root law of inventory?

A rough rule that total safety stock climbs with the square root of the warehouse count.

What textbook does OPM-4150 use?

Gourdin's second edition text on global logistics management as a source of competitive advantage.