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An electronics manufacturer ships partially assembled circuit boards ( hereafter called units ) from an assembly plant in Jorda Hide image transcript An electronics manufacturer
An electronics manufacturer ships partially assembled circuit
boards hereafter called units from an assembly plant in Jorda
Hide image transcript
An electronics manufacturer ships partially assembled circuit boards hereafter called units from an assembly plant in Jordan to a distribution center in UK We want to determine which transportation mode is lower in terms of total shipping cost. There are two options for shipping, the first is to ship in ft containers by ocean carriers or in airline containers by air carriers. Shipment by ocean costs $ per container, and a ft container can hold units. The handling cost is $ per ft container. The journey by sea takes days on average. Shipment by air costs $ per container, and an airline container can hold units. The handling cost is $ per airline container. The journey by air takes days on average door to door The forecasted demand is units for the next year, which is also the planned production quantity. No safety stock is kept at the assembly plant, and a shipment is sent to the distribution center as soon as a container is filled. Safety stock of units is kept at the distribution center. A unit is valued at $ at the assembly plant and $ at the distribution center. The inventory holding cost rate is estimated at of the value per year. The space cost is estimated as $unityear at the assembly plant and $unityear at the distribution center. Which transportation mode is more economical in terms of total annual transportation and inventory costShow your work for all cost elements and find the optimum shipment size In the blank below, fill in the optimal shipment size for the ocean mode round to the nearest integer
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