On July 1, 2020, the co-head of the logistics and planning department at Marico Ltd., based in India, was reviewing reports on various issues related to stock inventory and warehousing. After studying the reports, he found that both lost opportunity and warehousing costs for the company were high. Compounding the problem was the ongoing COVID-19 pandemic, which had added pressure to the company’s impending cost pressures. Initially, Marico Ltd. had thirty-three warehouses. However, after the Government of India introduced the Goods and Service Tax in 2017, various state taxes across the country were eliminated. The new law revolutionized the logistics industry and allowed Marico Ltd. to reduce the number of its warehouses to twenty-five. Could the company further reduce the number of warehouses without adversely impacting service levels?
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