SUPPLY CHAIN NETWORK OPTIMIZATION

Carrier Corporation Component Part Supply Chain Network Scenarios

Next Day

Same Day Order Cutoff Time

Location(s)

Order Cutoff Time

Inventory ($M)

Carrying Cost ($M)

Total

No. of

Logistics

Scenario

Locations

Transport

Inventory

Cost ($M)

Cost ($M)

Operator(s) KENCO $23.0 FDX+ $23.3 UPS+ $21.9

1 Day Truck % $100 39.2% 82.5% 1p $100 28.0% 81.2% 12a $100 52.2% 82.9% 12a $121 53.4% 99.6% 12a $121 41.5% 96.9% 1a $121 65.6% 100% 1a $137 77.0% 100% 2a $150 85.3% 100% 2a $162 95.5% 100% 3a 2 Day Truck %

A 1 B 1 C 1 D 2

Chattanooga

$20.0 $20.0 $20.0 $24.2 $24.2 $24.2 $27.4 $30.0 $32.4

$43.0 $43.3 $41.9 $38.8 $39.2 $38.6 $39.4 $39.5 $39.7

8a

Memphis Air Hub Louisville Air Hub

12p 12p 12p

Chattanooga, Reno KENCO+ $15.3

E

2 2

Memphis, Reno Louisville, Reno

FDX+ $17.0 UPS+ $14.4 UPS+ $12.0

1p 1p 2p 2p 3p

F

G 3 H 4

LVL, DAL, REN

SCR, CHI, MOB, REN TBD $9.5

I

5 SCR, CHI, ATL, REN, DAL

TBD $7.3

(1) Scenario definitions are rough cut and do not yet include deployment alternatives. (2) Costs and inventory levels are notional. (3) Order cutoff times are notional. (4) Transition costs to new 3PL/locations are not included.

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