Question
A manufacturing company purchases two important parts from two different suppliers in the same region. The two suppliers are located about 100 miles apart. There
A manufacturing company purchases two important parts from two different suppliers in the same region. The two suppliers are located about 100 miles apart. There are two shipping options for the two parts ordered.
Option 1: Orders are shipped separately from each supplier. The contracted trucking company charges $626 for a shipment from each supplier.
Option 2: Orders are aggregated in a single shipment. The trucking company needs to drive additional 100 miles to pick up orders from the other supplier. So there will be an additional charge of $201 for the additional stop.
The weekly demand and unit cost information are listed in the table below (assume 52 weeks/year). Assume the unit annual holding cost is 5% of the unit cost for part A, and 16% for part B.
Part A | Part B | |
Average weekly demand | 428 | 460 |
Unit cost | $12 | $19 |
Please determine the cycle inventory for part A in option 2.
Numbers only. Keep 3-decimal if not exact, either round up or down is ok.
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