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Imagine you work for a medical device manufacturer that produces products at two plants, one plant located in Los Angeles, California, and another located just
Imagine you work for a medical device manufacturer that produces products at two plants, one plant located in Los Angeles, California, and another located just outside Boston, Massachusetts. Your company uses a build-to-order manufacturing strategy, which can result in inconsistent freight flows. As such, both inbound components and outbound finished products are transported in full truckload quantities that are priced on a spot market basis. Assume the average distance from each plant to customers is approximately the same. Also, assume each plant ships the same number of products annually. Lastly, assume the distance from component suppliers to the plants is the same. Given this information, which plant is expected to have more volatile inbound transportation costs as conditions in the freight market evolve? Question 5 options: a) The plant in Los Angeles. b) The plant in Boston. c) Both plants will have equally volatile inbound transportation costs
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