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2. ITICC [25 points] A heavy duty crane manufacturing firm named Norsemen located in Amsterdam, the Netherlands, has agreed to purchase steel for a port
2. ITICC [25 points] A heavy duty crane manufacturing firm named Norsemen located in Amsterdam, the Netherlands, has agreed to purchase steel for a port gantry crane construction project in the port of Antwerp from a manufacturer in China. Assume currency is in Euros. There are two options for shipping the product: Ocean-Truck Intermodal (OTI), Ocean-Rail Intermodal (ORI). If the steel is shipped by OTI it will take 20 days at a cost of Euros7500 per container to transport. If the items are shipped by ORI, it will take 28 days at a cost of Euros 7000 per container to transport. The firm expects to buy 500 containers this year at a cost of Euros 8,000 per container. The cost of capital, used in determining the in-transit carrying cost of inventory is 12.5 % per year. Which mode should the purchasing agent select if her goal is to minimize total cost? Show your work (calculations). Place a box around each final calculation. Use appropriate currency. Question 1. Write the Generic algebraic formulae identifying all the variables: Note: Since the purchase is from the same firm, drop the last DC! [10] Generic algebraic formulae: Question 2. Show your work and the solution for OTI: [5] Question 3. Show youe work and the solution for ORI: [7] Question 4. Which is the lower cost option, express it in the form "XY.. X is the more cost efficient option" where X and Y are the means options and should be replaced with OTI and ORI [3] and this "therefore": 2. ITICC [25 points] A heavy duty crane manufacturing firm named Norsemen located in Amsterdam, the Netherlands, has agreed to purchase steel for a port gantry crane construction project in the port of Antwerp from a manufacturer in China. Assume currency is in Euros. There are two options for shipping the product: Ocean-Truck Intermodal (OTI), Ocean-Rail Intermodal (ORI). If the steel is shipped by OTI it will take 20 days at a cost of Euros7500 per container to transport. If the items are shipped by ORI, it will take 28 days at a cost of Euros 7000 per container to transport. The firm expects to buy 500 containers this year at a cost of Euros 8,000 per container. The cost of capital, used in determining the in-transit carrying cost of inventory is 12.5 % per year. Which mode should the purchasing agent select if her goal is to minimize total cost? Show your work (calculations). Place a box around each final calculation. Use appropriate currency. Question 1. Write the Generic algebraic formulae identifying all the variables: Note: Since the purchase is from the same firm, drop the last DC! [10] Generic algebraic formulae: Question 2. Show your work and the solution for OTI: [5] Question 3. Show youe work and the solution for ORI: [7] Question 4. Which is the lower cost option, express it in the form "XY.. X is the more cost efficient option" where X and Y are the means options and should be replaced with OTI and ORI [3] and this "therefore
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