A company ships from its manufacturing facilities directly to its warehouses.

When the number of warehouses increases, transportation costs between manufacturing facilities and warehouses are likely to increase. This is because each additional warehouse introduces new destinations for shipments, leading to more frequent and smaller shipments from manufacturing facilities to each warehouse. This fragmentation of shipments generally increases the total transportation costs, as larger shipments are typically more cost-effective due to economies of scale. Additionally, managing a larger number of shipping routes can add complexity and logistical costs.