Part B: Problem Solving Show math for credit! Problem 1 A company has goods in t

Question

Part B: Problem Solving Show math for credit! Problem 1 A company has goods in transit 365 days per year and its annual hold cost is 40% There are 3 logistics options for shipping several crates of electronics, with a total value of $250,000: Shipping Cost $3,500 Total Duration 3 calendar days Option Multi-Mode Description 1. 2. 3. 1. 2. 1. 2. Truck to airport, Air Cargo to local airport, Truck to final destination. Train to transfer point, Truck to final destination Inland waterway port to destination port. Truck to final destination $1,800 6 calendar days $1,500 8 calendar days 1A. Determine the best OPTION based on economics. (7 points 1B. In Option C, the company offered assigning an extra truck driver to expedite the shipment on the trucking segment. Analyze the economics of the proposal. (3 points)

Explanation / Answer

1. A

Hence option B is the best option

1 B

We see there are muliple scenario:

Option A Option B Option C Duration 3 6 8 Total value 250000 250000 250000 Dur*Total value Value of shipment 2054.795 4109.589 5479.452 Holding cost @40% 821.9178 1643.836 2191.781 Order cost 3500 1800 1500 Total cost 4321.918 3443.836 3691.781

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