Demand is 30000 of bulky boxes shipment is by truck capacity of a truck is 5000 boxes transit time to new york is 5 days in addition analysis of data show lead time has Sd of 2 days estimate from accounting that annual holding cost is 20% cost of product supplies for 15$ per pack assume derived 95% full truckload are shipped cost of to new York by third party carrier is 3000 assume 1 month =30 days What is total logistics cost of the current system in $? Transportation cost per month? Safety Stock holding cost per month? Cycle stock holding cost per month? Pipeline holding cost per month? Total cost per month?
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Demand is 30000 of bulky boxes shipment is by truck capacity of a truck is 5000 boxes transit time to new york is 5 days in addition analysis of data show lead time has Sd of 2 days estimate from accounting that annual holding cost is 20% cost of product supplies for 15$ per pack assume derived 95% full truckload are shipped cost of to new York by third party carrier is 3000 assume 1 month =30 days
What is total logistics cost of the current system in $?
Transportation cost per month?
Safety Stock holding cost per month?
Cycle stock holding cost per month?
Pipeline holding cost per month?
Total cost per month?
Holding Cost Per month = (Annual Holding Cost * Per Pack Price) / 12
Holding Cost Per month = (20%*15)/12
Holding Cost Per month = 3/12
Holding Cost Per month = .25
Transportation Cost per month = (Demand per month/Capacity of truck )*Shipment Cost
Transportation Cost per month = (30,000/5000)*3000
Transportation Cost per month = 6*3000
Transportation Cost per month = 18,000 per month
Cycle Stock Cost = Order size in truckload/2*Holding cost per month
Cycle Stock Cost = 5000/2*.25
Cycle Stock Cost = 625 per month
In transit inventory cost = (Monthly Demand * Average Days in transit)/30 * Holding cost per month
In transit inventory cost =(30,000* 5)/30 * .25
In transit inventory cost = 150,000/30*.25
In transit inventory cost = 1250
Total Logistics Cost = Cycle stock cost + Transportation cost + In transit inventory cost
Total Logistics Cost = 625+18000+1250
Total Logistics Cost = 19,875 per month
Total Logistics Cost per annum = 19875*12
Total Logistics Cost per annum = 238,500
Transportation Cost per month = (Demand per month/Capacity of truck )*Shipment Cost
Transportation Cost per month = (30,000/5000)*3000
Transportation Cost per month = 6*3000
Transportation Cost per month = 18,000 per month
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