JavaFlow Logistics Decision Engine

Fulfillment Make-vs-Buy Model

Evaluate 3PL outsourcing vs. bringing fulfillment in-house (12,000 sq ft facility) over a 36-month horizon.
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Recommendation: Bring In-House

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3PL 3-Yr NPV Cost
$0
Outsourced total discounted cost
In-House 3-Yr NPV Cost
$0
Including Capex & ramp-up penalties
Net NPV Savings
$0
Savings by moving in-house
Break-Even Horizon
Month 0
When cumulative savings offset Capex
Model Assumptions
Annual Demand Growth 40%
Projected annualized order growth rate from the historical baseline.
3PL Rate Adjustment 0%
Simulate a 3PL rate hike or negotiated volume discount.
In-House Staff Cost $48,000
Fully-loaded annual salary per FTE (Base: 6 FTEs).
Cost of Capital (WACC) 12%
Annualized discount rate used for 3-year NPV calculations.
Cumulative Cost Projections (36 Months)
3PL Outsourcing
In-House Fulfillment
Volume Sensitivity Analysis (+/-20%)

How the decision and NPV savings flip if future demand deviates from expectations.

Volume Scenario Avg Monthly Orders 3PL NPV Cost In-House NPV Cost Net Savings Recommendation
Key Strategic Drivers
1

Shipping Rate Delta ($0.78/lb vs 3PL)

By bringing fulfillment in-house, JavaFlow accesses a negotiated outbound rate of $0.78/lb. Under the 3PL's historical $1.10/lb structure, shipping represents the single largest cost penalty of outsourcing as package weight scales.

2

Operational Leverage & Labor Efficiency

The 3PL charges per-unit pick and pack fees. In-house fulfillment replaces variable pick/pack fees with fixed lease costs ($13,800/mo) and structured FTE labor, driving down unit cost significantly at higher order volumes.

3

Capex Payback & Cost of Capital

The upfront $99,000 investment (equipment capex + warehouse fit-out) is heavily penalized in the first 3 months by a 60% operational efficiency ramp. A lower cost of capital makes the long-term cash flow savings of the in-house option more attractive.

Reconstructed Historical Baseline (731 Days Parsed)

Verified Data Base
Total Logs Analyzed 731 Days (24 Mos)
Total Historical Orders 398,421
Avg Order Weight 1.50 lbs
Total 3PL Real Spend $3,386,578
Avg Cost Per Order $8.50