A retail has 8 stores supplied from 4 suppliers, where each supplier supplies different goods. Delivery from the Supplier is in trucks with a capacity of 50,000 units at a cost of $1100 per load plus $100 per delivery to the store. Inventory costs are $0.1 per unit per year. The Supply Chain Manager is considering whether to use direct shipping or Milk Run delivery for 4 stores for each truck in one shipment a) if annual sales in each store are 1000,000 units, which shipping method provides the lower cost b) if the annual sales in each store are 200,000 units, which shipping method provides the lower cost
A retail has 8 stores supplied from 4 suppliers, where each supplier supplies different goods. Delivery from the Supplier is in trucks with a capacity of 50,000 units at a cost of $1100 per load plus $100 per delivery to the store. Inventory costs are $0.1 per unit per year. The Supply Chain Manager is considering whether to use direct shipping or Milk Run delivery for 4 stores for each truck in one shipment a) if annual sales in each store are 1000,000 units, which shipping method provides the lower cost b) if the annual sales in each store are 200,000 units, which shipping method provides the lower cost
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
A retail has 8 stores supplied from 4 suppliers, where each supplier supplies different
goods. Delivery from the Supplier is in trucks with a capacity of 50,000 units at a cost of
$1100 per load plus $100 per delivery to the store. Inventory costs are $0.1 per unit per
year. The Supply Chain Manager is considering whether to use direct shipping or Milk Run
delivery for 4 stores for each truck in one shipment
a) if annual sales in each store are 1000,000 units, which shipping method provides the
lower cost
b) if the annual sales in each store are 200,000 units, which shipping method provides the
lower cost
Transcribed Image Text:A retail has 8 stores supplied from 4 suppliers, where each supplier supplies different
goods. Delivery from the Supplier is in trucks with a capacity of 50,000 units at a cost of
$1100 per load plus $100 per delivery to the store. Inventory costs are $0.1 per unit per
year. The Supply Chain Manager is considering whether to use direct shipping or Milk Run
delivery for 4 stores for each truck in one shipment
a) if annual sales in each store are 1000,000 units, which shipping method provides the
lower cost
b) if the annual sales in each store are 200,000 units, which shipping method provides the
lower cost
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