Part B: Problem Solving Show math for credit! Problem 1: Supply Chain Analytics,

Question

Part B: Problem Solving Show math for credit! Problem 1: Supply Chain Analytics, Modal Analysis 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 $285,062.50 in US currency Shipping Cost $2,500 Option Multi-Mode Description Total Duration 3 calendar days 1. Truck to airport, 2. Air Cargo to local airport, 3. Truck to final destination 1. Train to transfer point, 2. Truck to final destination. 1. Inland waterway port to destination port 2. Truck to final destination $1,900 6 calendar days $1,500 8 calendar days 1A. Determine the best OPTION based solely on economics. (7 points)

Explanation / Answer

So option A is better as total cost is lowest

Annual Hold Cost 40% Total value 285062.5 $ Annual Holding cost 114025 $ Per day holding cost (365days) 312 $ Option C Inland waterway port to destination 1500 $ 8days Inventory Holding cost (312*8) 2499.178 $ Total Cost 3999.178 $ Option B Train to transfer point 1900 $ 6days Inventory Holding cost(312*6) 1874.384 $ Total Cost 3774.384 $ Option A Air Cargo to Local airport 2500 $ 3days Inventory Holding cost(312*3) 937.1918 $ Total Cost 3437.192 $

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