Joburg Logistics (JL), a distributor of various products inPolokwane receives their products from suppliers inDurban, Cape Town, and Johannesburg. The company'smanagement is concerned with the supply cost of acertain product that is supplied by a manufacturer inDurban. Currently JL has a contract with Transnet FreightRail (TFR) for the transport of the orders from Durban. Thefollowing are the rail rate and transit time:Transit time (rail)Rail rate5 daysR2.75/unitThe impact on the transport and inventory carrying costbecause of this arrangement is a concern of the logisticsdirector, Mrs Micky. As a result, Mrs Micky has requestedthe logistics manager to evaluate the option to use a 3PLservice provider for the shipment from Durban toJohannesburg. The logistics manager has identified acertain 3PL company that has the capacity to perform thiscontract. However, in order to provide a transport rate, the3PL company required the size and frequency of orders.JL currently uses the EOQ approach to determine theorder size and based on this the 3PL company hasprovided the following transport rates:EOQ Order 100 unitsTransport rate (Rand/unit) 3.50 3.10Transit time (days)31The logistics manager has obtained the followinginformation:Annual demand (units)Product value (Rand/unit)Inventory carrying costOrder costIn-transit inventory carrying costWhich option would you recommend that GP use?(Hint: Assume 360 days/annum. Comparison of thepossible options should be based on TAC)1 000R65020%R3512%

TAC is the total annual cost that includes both transportation and inventory carrying costs.Evaluate…

Answered: Joburg Logistics (JL), a distributor of…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Lancelot’s Barbecue makes its sauce using an old family recipe. Due to overwhelming response on its Instagram account in January 2020, it decides to sell directly to the public and is considering four locations. Two months later, the world shuts down due to the Covid-19 pandemic and Lancelot’s fails to produce a single bottle of its sauce. Which location would have been ideal for making no sauce? Cost Data Abilene Beaumont Conroe Dalhart Fixed costs $180,000 $220,000 $235,000 $265,000 Direct material cost per unit $10.50 $10.00 $10.00 $9.25 Direct labor cost per unit $3.90 $4.00 $2.75 $3.45 Overhead per unit $1.10 $1.00 $1.50 $1.20 Transportation cost per unit $1.10 $0.80 $1.25 $0.90 a. Dalhart b. Beaumont c. Conroe d. Abilene
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Pro-Carpet company manufactures carpets in Northwest Indiana and delivers them to warehouses and retail outlets. The network diagram is given in the figure below shows the possible routes and distances from the carpet plant in Valparaiso to the various warehouses or retail outlets. 12 11 13 Hi 6 15 20 10 M На
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