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1. What is the economic order quantity for BBE in units? In pounds?  4.What is the total cost for using air carrier transportation?

1. What is the economic order quantity for BBE in units? In pounds?  4.What is the total cost for using air carrier transportation?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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1. What is the economic order quantity for BBE in units? In pounds? 

4.What is the total cost for using air carrier transportation?

Baseball Card Emporium. Baseball Card Emporium (BBE) of Lewistown, Pennsylvania, is a distributor of baseball cards to sports card retailers. Its market area encompasses most of Pennsylvania, eastern Ohio, and New Jersey. The cards are printed in Neenah, Wisconsin, and currently shipped to Lewistown via motor carrier transportation. Kenny Craig, vice president of logistics, has asked his staff to evaluate using air carrier service to ship the cards. Nick Gingher, director of distribution, has collected the following information: • Annual demand: 6,000 cases of cards • Case value (price): $96 each • Inventory carrying cost (annual): 30% • Cost per order to replenish inventory: $75 In-transit inventory carrying cost: 18% ⚫ Transit time using motor carrier (parcel ground: 4 days ⚫ Cycle time using motor carrier (parcel ground): 7 days ⚫ Transit time using air carrier: 1 day Cycle time using air carrier:2 days • Motor carrier rate: $1.20 per cwt. (100 lbs.) ⚫ Air carrier rate: $2.50 per cwt. ⚫ Unit weight: 50 lbs. per case
Transcribed Image Text:Baseball Card Emporium. Baseball Card Emporium (BBE) of Lewistown, Pennsylvania, is a distributor of baseball cards to sports card retailers. Its market area encompasses most of Pennsylvania, eastern Ohio, and New Jersey. The cards are printed in Neenah, Wisconsin, and currently shipped to Lewistown via motor carrier transportation. Kenny Craig, vice president of logistics, has asked his staff to evaluate using air carrier service to ship the cards. Nick Gingher, director of distribution, has collected the following information: • Annual demand: 6,000 cases of cards • Case value (price): $96 each • Inventory carrying cost (annual): 30% • Cost per order to replenish inventory: $75 In-transit inventory carrying cost: 18% ⚫ Transit time using motor carrier (parcel ground: 4 days ⚫ Cycle time using motor carrier (parcel ground): 7 days ⚫ Transit time using air carrier: 1 day Cycle time using air carrier:2 days • Motor carrier rate: $1.20 per cwt. (100 lbs.) ⚫ Air carrier rate: $2.50 per cwt. ⚫ Unit weight: 50 lbs. per case
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