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Indigo Ostrich case analysis sent last night! 1 . What is the total annual logistics cost of inventory and transportation associated with the current practice
Indigo Ostrich case analysis sent last night!
What is the total annual logistics cost of inventory and transportation associated with the current practice of shipping product by railroad freezer cars to Elizabeth, NJ and then by commercial trucks to retail outlets? Safety stocks under this scenario are cases. Base your
calculations on expected sales. Show your calculations.
What would the total annual logistics cost be if the company uses the private fleet option? Safety stocks under this scenario are reduced to cases. Show your calculations.
What would the total annual logistics cost be if the company uses the option of shipping product by air to the retail outlets? You will need to estimate safety stocks for this scenario. To keep it simple, use the safety stock numbers for the above questions to estimate your number based on lead time, since we do not have standard deviation figures for sales. Show your calculations.
The above scenarios all use the EOQ model to calculate their costs. Would you consider this the most appropriate inventory model to use, and if not, what alternative would you suggest, and why? If you conclude that the EOQ model is the best, explain why as well.
What other advice would you provide to The Indigo Ostrich executives that could further improve their supply chain? This advice could include risk reduction, cost reduction, service improvement or any other advice that could improve their operationsand supply chain.
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