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You are currently working as logistics manager for a manufacturing company based in Melbourne. Your company has a new customer in France and your CEO
You are currently working as logistics manager for a manufacturing company based in Melbourne. Your company has a new customer in France and your CEO asks you to advise the optimal logistics solution for a shipment with the value of $5,000 per ton to be shipped from Melbourne, Australia to Le Havre, France. The inventory carrying cost of this shipment is 20% of its value per year. The followings are some other transport details: Direct sea transport between Melbourne to Le Havre takes about 30 days and at about $150 per ton. Direct air transport on this route takes about 3 days and at the cost of $3,000 per ton. You may also consider transhipment at Dubai Port (for sea transport) and Dubai Airport (for air transport). In this case: Sea transport between Melbourne and Dubai is about 60% of the time between Melbourne and Le Havre and costs $120 per ton while air transport would take about 2 days at about $1,500 per ton. O Sea transport between Dubai and Le Havre is about 10 days and costs $80 per ton while air transport on this route would take about 1 day at about $1,000 per ton. O It is known that the shipment has to stay 2 days at Dubai Port and 1 day at Dubai Airport before being loaded on board the new vessel or airplane if the transhipment method is used. Question 1: What would be your advice to the CEO regarding the optimal logistics solution
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