Question

"Why do transportation costs initially decrease as the number of warehouses in a system increases? Why do transportation costs eventually increase as the number of warehouses increase? Why do inventory costs increase as the number of warehouses in a system increases? "

Answer 1

In simple words, The general explanation is that efficiency gains do exist. Which lowers the cost of transport. In addition, as products are delivered to the facilities, one boat load will support more just one storage facility, lowering the expense of transport. In addition, as products are delivered to the facilities, one boatload will support rather than one supermarket, lowering the cost of transport.