Question
Complete the calculations for Question 2 of the case study, determining the point in level of demand (pounds) where the two alternatives are equal. (Data
Complete the calculations for Question 2 of the case study, determining the point in level of demand (pounds) where the two alternatives are equal. (Data is below)
Question 2: At what level of demand (in pounds) per year would thee two alternatives be equal?
From the information arrived at in Question 2, complete Question 3:--graphically representing the two alternatives and the point where the Ocean and Air options would be equal.
Question 3: Graphically represent these two alternatives and their trade off point.
Question 4: In 1-2 paragraphs, summarize the following:
Which option--Ocean or Air--would be the best alternative? What criteria did you use to reach this decision?
Which option--Ocean or Air--would be the best alternative to support future growth? What additional criteria did you consider to reach this decision?
Ocean | Air | ||||
Total Transportation Costs | 150,000 | 290,000 | |||
Inventory Costs | |||||
Carrying | 48,000 | 23,000 | |||
Handling | 20,000 | 22,000 | |||
Ordering | 7,000 | 15,000 | |||
Fixed Cost | 600,000 | 450,000 | |||
Total Costs | 823,000 | 800,000 |
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