International trade may offer lower unit prices but at a higher risk. Consider the total cost and trade off lower production costs with higher priced transportation and more uncertain delivery schedules. Add in disruptive weather patterns, multi-language requirements, and fluctuating exchange rates; not to mention political turmoil, labor disputes, and unique tariffs and duties. throughout the world there is one source for Schachtel Schmuggel Bannware: CousinsAg, a domestic supplier located in Wahoo, Nebraska Throughout this turnaround, we will ship utilizing Twenty-foot Equivalent Units (TEUs) from each location. Assume the following: Projected Annual Demand is 21,500 units There are 365 days in a year All product will be shipped to a distribution center in Alliance Fort Worth (AFW) where we will service our customer's needs Inventory carrying cost is 32.2% A TEU container can hold up to 600 units of our product. The Harris EOQ formula is Q* = SQRT((2Annual DemandOrdering Cost)/(Inventory Carrying Cost*Unit Price)) Our goal is to maintain a 97.7% service level. We have a deviation in daily sales of 11 units. We cannot buy or hold fractional units of a product Purchase Cost of $85 Order Cost of $105 10 days to process, manufacture and pack order to be ready for shipping $1850 is the cost to ship Shipping Time is 5 days with a standard deviation of 1.14 days In-Transit Cost is $0.3749 Per Unit Average Inventory Held at Distribution Center is 364 Units Inventory Carrying Costs are based on the value of the product at the time it is held in inventory. When the product is sitting in the Alliance Fort Worth distribution center, it's value is a combination of purchase price PLUS any transportation costs to get it from the supplier to the DC PLUS in-transit carrying costs. What is the TOTAL ANNUAL INVENTORY CARRYING COST (in dollars) for our product if we purchase everything from CousinsAg?

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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International trade may offer lower unit prices but at a higher risk. Consider the total cost and trade off lower production costs with higher priced transportation and more uncertain delivery schedules. Add in disruptive weather patterns, multi-language requirements, and fluctuating exchange rates; not to mention political turmoil, labor disputes, and unique tariffs and duties.

throughout the world there is one source for Schachtel Schmuggel Bannware:

CousinsAg, a domestic supplier located in Wahoo, Nebraska

Throughout this turnaround, we will ship utilizing Twenty-foot Equivalent Units (TEUs) from each location. Assume the following:

Projected Annual Demand is 21,500 units
There are 365 days in a year
All product will be shipped to a distribution center in Alliance Fort Worth (AFW) where we will service our customer's needs
Inventory carrying cost is 32.2%
A TEU container can hold up to 600 units of our product.
The Harris EOQ formula is Q* = SQRT((2*Annual Demand*Ordering Cost)/(Inventory Carrying Cost*Unit Price))
Our goal is to maintain a 97.7% service level.
We have a deviation in daily sales of 11 units.
We cannot buy or hold fractional units of a product
Purchase Cost of $85
Order Cost of $105
10 days to process, manufacture and pack order to be ready for shipping
$1850 is the cost to ship
Shipping Time is 5 days with a standard deviation of 1.14 days
In-Transit Cost is $0.3749 Per Unit
Average Inventory Held at Distribution Center is 364 Units

Inventory Carrying Costs are based on the value of the product at the time it is held in inventory. When the product is sitting in the Alliance Fort Worth distribution center, it's value is a combination of purchase price PLUS any transportation costs to get it from the supplier to the DC PLUS in-transit carrying costs. What is the TOTAL ANNUAL INVENTORY CARRYING COST (in dollars) for our product if we purchase everything from CousinsAg?

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