A China-Bangladesh joint venture company is manufacturing a device in China and selling it in Bangladesh. The annual demand for the device in Bangladesh is 14400 units with a standard deviation of 6 units per day. The cost of each device is $750 and annual holding costs are 20 percent of the price. Consider 360 days in a year. There are two shipping alternatives: Regular Shipping and Express Shipping. The freight charges for regular shipping is $25 per device and $33 per device with express shipping. Regular shipping requires a lead time is 25 days with an std. dev. of 4 days whereas the lead time for express shipping is 16 days with an std. dev. of 2 days. Minimum effective loads for regular and express are 5000 units and 3000 units respectively. There are 0.08% and 0.12% damage rate with regular and express shipping. - Evaluate and find which alternative mode would be selected to transport the device.
Definition Definition Measure of central tendency that is the value that occurs most frequently in a data set. A data set may have more than one mode if multiple categories repeat an equal number of times. For example, in a data set with five item—3, 5, 5, 29, 473—the mode is 5 because it occurs twice and no other value occurs more than once. On a histogram or bar chart, the element with the highest bar represents the mode. Therefore, the mode is sometimes considered the most popular option. The mode is useful for nominal or categorical data (e.g., the most common color car that users purchase), but it is problematic for continuous data because it is more likely not to have any value that is more frequent than the other.
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