Principles Of Marketing
Principles Of Marketing
17th Edition
ISBN: 9780134492513
Author: Kotler, Philip, Armstrong, Gary (gary M.)
Publisher: Pearson Higher Education,
Bartleby Related Questions Icon

Related questions

Question

4

KLG is a textile manufacturer in Shanghai. They want to expand their t-shirt business into the United
States. They have dedicated a factory in KLG to making the tshirts, and the production rate at that
facility is 250 pallets of t-shirts per day. KLG's factory uses a just-in time production model so they
store no safety stock at their manufacturing facility in Shanghai. The cost of space at the Shanghai
facility is $30 per pallet per year. Each pallet has a value of $2000. KLG is opening a distribution
center in Los Angeles from which they will serve the American demand for 250 pallets of t-shirts per
day. They keep a safety stock of 1200 pallets of t-shirts at the distribution center. The cost of space
at the LA facility is $40 per pallet per year. Each pallet has a value of $2200. KLG hires you as a
logistics consultant to help them decide whether to transport the t-shirts from Shanghai to Los
Angeles using sea or air. KLG uses a holding cost rate of 20%.
FlyHigh Airline has submitted a bid to KLG. They will guarantee a transport time of 3 days and will
accept shipments up to 400 pallets in size. They will charge $1300 per shipment transportation costs
and $500 per shipment material handling costs.
OceanMotion is a sea cargo line that has also submitted a bid to KLG. They guarantee a transport
time of 18 days and will accept any size shipment. They charge a flat transportation and handling fee
of $1000 per shipment. In the following questions, express your answer in terms of q only where
necessary.
Calculate the annual pipeline inventory costs when air is the chosen mode. $
million
Calculate the annual holding cost when at the plant if shipment size is 400 pallets. $
expand button
Transcribed Image Text:KLG is a textile manufacturer in Shanghai. They want to expand their t-shirt business into the United States. They have dedicated a factory in KLG to making the tshirts, and the production rate at that facility is 250 pallets of t-shirts per day. KLG's factory uses a just-in time production model so they store no safety stock at their manufacturing facility in Shanghai. The cost of space at the Shanghai facility is $30 per pallet per year. Each pallet has a value of $2000. KLG is opening a distribution center in Los Angeles from which they will serve the American demand for 250 pallets of t-shirts per day. They keep a safety stock of 1200 pallets of t-shirts at the distribution center. The cost of space at the LA facility is $40 per pallet per year. Each pallet has a value of $2200. KLG hires you as a logistics consultant to help them decide whether to transport the t-shirts from Shanghai to Los Angeles using sea or air. KLG uses a holding cost rate of 20%. FlyHigh Airline has submitted a bid to KLG. They will guarantee a transport time of 3 days and will accept shipments up to 400 pallets in size. They will charge $1300 per shipment transportation costs and $500 per shipment material handling costs. OceanMotion is a sea cargo line that has also submitted a bid to KLG. They guarantee a transport time of 18 days and will accept any size shipment. They charge a flat transportation and handling fee of $1000 per shipment. In the following questions, express your answer in terms of q only where necessary. Calculate the annual pipeline inventory costs when air is the chosen mode. $ million Calculate the annual holding cost when at the plant if shipment size is 400 pallets. $
Expert Solution
Check Mark
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Principles Of Marketing
Marketing
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Pearson Higher Education,
Text book image
Marketing
Marketing
ISBN:9781259924040
Author:Roger A. Kerin, Steven W. Hartley
Publisher:McGraw-Hill Education
Text book image
Foundations of Business (MindTap Course List)
Marketing
ISBN:9781337386920
Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:Cengage Learning
Text book image
Marketing: An Introduction (13th Edition)
Marketing
ISBN:9780134149530
Author:Gary Armstrong, Philip Kotler
Publisher:PEARSON
Text book image
MKTG 12:STUDENT ED.-TEXT
Marketing
ISBN:9781337407595
Author:Lamb
Publisher:Cengage
Text book image
Contemporary Marketing
Marketing
ISBN:9780357033777
Author:Louis E. Boone, David L. Kurtz
Publisher:Cengage Learning