ABC Ltd. manufactures product P and delivers to its 16 retailer stores. Annual demand for P at each retail store is 100,000 units. ABC uses its own trucks for delivery and a truck has the capacity for 50,000 units. The truck costs $3,000 per load and $300 per delivery. The inventory holding cost at the retailer is 15% of the unit cost of P. Cost of a P is $20. Find the annual cost (inventory cost + transportation cost) of the supply chain network if milk runs of size 4 is used milk runs of size 8 is used
ABC Ltd. manufactures product P and delivers to its 16 retailer stores. Annual demand for P at each retail store is 100,000 units. ABC uses its own trucks for delivery and a truck has the capacity for 50,000 units. The truck costs $3,000 per load and $300 per delivery. The inventory holding cost at the retailer is 15% of the unit cost of P. Cost of a P is $20. Find the annual cost (inventory cost + transportation cost) of the supply chain network if milk runs of size 4 is used milk runs of size 8 is used
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
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ABC Ltd. manufactures product P and delivers to its 16 retailer stores. Annual demand for P at each retail store is 100,000 units. ABC uses its own trucks for delivery and a truck has the capacity for 50,000 units. The truck costs $3,000 per load and $300 per delivery. The inventory holding cost at the retailer is 15% of the unit cost of P. Cost of a P is $20. Find the annual cost (inventory cost + transportation cost) of the supply chain network if
milk runs of size 4 is used
milk runs of size 8 is used
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