Question
The FLEX Corporation has two plants located in Spokane Washington and Houston, Texas that manufacture components A and B respectively for use at an assembly
The FLEX Corporation has two plants located in Spokane Washington andHouston, Texasthat manufacture components A and B respectively for use at an assembly plant inSyracuse, NY.
Transit time from Spokane and Houston to the plant in Syracuse is 9 days. Demand at the Syracuse plant is 250 units of component A and 125 units of component B each day.
The plants ship in full truckloads, each truck has a maximum capacity of 1750 components (both components are of similar size). Holding cost for the assembly plant and in-transit inventory is $0.50/unit/ day and freight cost for a truckload is $ 1500 from either component plant to Syracuse.
- Calculate the total logistics cost of this plan.
- Calculate the total logistics cost of a smaller truck which only holds 1375 units but costs $1200
- What is the ideal order size (EOQ) for each truck price for each unit? In other words what is the idea order size for each cell given holding cost c = $0.50 per unit per day:
Component A (D=250 units/day) | Component B (D=125 units/day) | |
Big Truck A=$1500 | ||
Small Truck: A=$1200 |
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