Question: 1 6 . A two - wheeler manufacturing company based in Pune serves primarily two markets, Mumbai and Surat and accordingly sends two wheelers to
A twowheeler manufacturing company based in Pune serves primarily two markets, Mumbai and Surat and accordingly sends two wheelers to two depots located at Mumbai and Surat. Weekly demand at each of these depots is units. The distances of Mumbai and Surat depot from Pune manufacturing facility are and kms respectively. The distance between Mumbai and Surat depot is kmsThe company is considering TWO strategies for shipping the finished products from its plants to the depots, viz. i Direct shipping and ii Shipping through milk run.For this purpose, the company uses truck through FTL shipment. A truck can carry twowheelers in FTL shipment. The transportation cost is Rs per km for FTL shipments. To obtain economies of scale, the company has decided to work with FTL shipments. The inventory carrying cost both of a twowheeler is Rs per unit per year. Consider weeks in a year.
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