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1. A manufacturer supplies electric motors to a distributor on a delivered-price basis. The manufacturer has the responsibility for providing transportation. The manufacturer's traffic manager
1. A manufacturer supplies electric motors to a distributor on a delivered-price basis. The manufacturer has the responsibility for providing transportation. The manufacturer's traffic manager has three transportation service choices for delivery: rail, piggyback, and truck. The traffic manager has compiled the following information Transport mode Transit time in Days Rate $/unit Shipment size, Units Rail 22 22.00 12.000 Piggyback 12 44.00 6.000 Truck 5 88.00 4.000 The distributor purchases 50,000 units per year at a delivered contract price of $500 per unit. Inventory carrying cost for both companies is 30 percent per year. Which mode of transportation should the traffic manager select
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