Ford's production facility in Kocaeli and Toyota's factory in Adapazar make shipments to Turkey. different regions of Turkey. Each company uses its own vehicles to

Ford's production facility in Kocaeli and Toyota's factory in Adapazarı make shipments to Turkey.

different regions of Turkey. Each company uses its own vehicles to ship, and most

Due to the decreasing demand in recent years, the vehicles used in the shipments are not fully loaded.

days. In fact, the two production sites are close together and shared use may make sense.

Means of transportation to the east of Turkey instead of sending the shipments separately.

Consider shipping to Ankara to show possible savings using shared posts

dealers. In 2010, Toyota expects to sell 1200 cars and Ford 800 cars in Ankara.

The freight cost (vehicle + driver + gas) from Kocaeli-Adapazarı region to Ankara is 1000$. Fee

Receiving the cars from each manufacturing facility adds another $200 to shipping costs.

The annual holding cost rate for Producers is 20% for each plant visited. every car

it costs the shipped (Ford or Toyota) manufacturer an average of $30,000.

a. Currently, Toyota and Ford are sending vehicles to Ankara dealers separately.

I. Find Toyota's optimal shipping quantity, frequency and total annual shipping cost

and it is holding.

ii. Find Ford's optimal shipping quantity, frequency, and total annual shipping cost

and it is holding.

b. Now, every time a truck leaves Kocaeli-

It receives shipments from both Ford and Toyota from Adapazarı region to Ankara. lets assume that

The $1000 shipping cost will be shared equally by the two manufacturers. Later

I. What is the optimal sorting frequency?

ii. Find the shipment quantity and the total annual shipping and holding cost for Toyota.

iii. Find the shipment amount and the total annual shipping and holding cost for Ford.

c. Compare the total costs found for each manufacturer in sections (a) and (b). For every company

What is the best shipping strategy, separate or all in bulk?