A company in Hungary manufactures and sell the product "Mini Bike". The company operates at maximum capacity, producing seven days a week, which makes 50 000 units per year. (To make it simple, we assume that a year has 50 weeks.) The value of a Mini Bike unit leaving production is €100. The cost of capital is estimated to 20%. The cost for holding inventory is 15%, which gives a total inventory carrying cost percentage of 35%. No safety stock is kept in Hungary. Mini Bike is distributed to a wholesaler in the UK, where it's sold to the end customers. There are two transportation alternatives - by rail or by truck: • By rail means a dispatch every 14 days. The transportation time is one week. The cost is €4/unit. • By truck means a dispatch every week. The transportation time is two days. The cost is €6/unit. In the UK, the wholesaler has a safety stock corresponding to half a week of sales. Which distribution alternative gives the lowest total cost when considering the transportation cost and inventory carrying cost, in Hungary, during transportation and in the UK? a. What is the Inventory holding cost in Hungary, if transported by train? b. What is the Inventory holding cost in Hungary, if transported by truck? c. What is the Inventory holding cost during transportation, if transported by train? d. What is the Inventory holding cost during transportation, if transported by truck? e. What is the Inventory holding cost in the UK, if transported by train? f. What is the Inventory holding cost in the UK, if transported by truck? g. What is the cost for transportation, if transported by train? h. What is the cost for transportation, if transported by truck? i. What is the total cost, if transported by train? j. What is the total cost, if transported by truck?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
3.A company in Hungary manufactures and sell the product "Mini Bike". The company operates at maximum capacity, producing seven days a week, which makes 50 000 units per year. (To make it simple, we assume that a year has 50 weeks.) The value of a Mini Bike unit leaving production is €100. The cost of capital is estimated to 20%. The cost for holding inventory is 15%, which gives a total inventory carrying cost percentage of 35%. No safety stock is kept in Hungary. Mini Bike is distributed to a wholesaler in the UK, where it's sold to the end customers. There are two transportation alternatives - by rail or by truck:
• By rail means a dispatch every 14 days. The transportation time is one week. The cost is €4/unit. • By truck means a dispatch every week. The transportation time is two days. The cost is €6/unit. In the UK, the wholesaler has a safety stock corresponding to half a week of sales. Which distribution alternative gives the lowest total cost when considering the transportation cost and inventory carrying cost, in Hungary, during transportation and in the UK?
a. What is the Inventory holding cost in Hungary, if transported by train?
b. What is the Inventory holding cost in Hungary, if transported by truck?
c. What is the Inventory holding cost during transportation, if transported by train?
d. What is the Inventory holding cost during transportation, if transported by truck?
e. What is the Inventory holding cost in the UK, if transported by train?
f. What is the Inventory holding cost in the UK, if transported by truck?
g. What is the cost for transportation, if transported by train?
h. What is the cost for transportation, if transported by truck?
i. What is the total cost, if transported by train?
j. What is the total cost, if transported by truck?
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