A business sells 15,600 units per month at a price of $85 per unit. Each unit...

 

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A business sells 15,600 units per month at a price of $85 per unit. Each unit cost the company $40. Based upon past performance when it delivers the product late, 75% of customers are willing to accept late orders, while the remaining customers return the product or refuse the order. Customers pay for the shipping and if products are late the shipper waives their fee; however, it cost the company $25 to restock refused and returned orders, and a 20% late penalty for accepted late orders. Refused and returned orders are then returned to stock. The company has calculated its inventory carrying rate is 28%. The business is considering switching delivery companies. If all other operating cost stay the same, given the information in the table below, calculate financial impact of on-time delivery failures. And, then determine whether the business should switch suppliers. Average on-time delivery rate Unit Shipping Cost Current 3PL Delivery Service 0.95 $18.00 New 3PL Delivery Service 0.98 $21.00 A business sells 15,600 units per month at a price of $85 per unit. Each unit cost the company $40. Based upon past performance when it delivers the product late, 75% of customers are willing to accept late orders, while the remaining customers return the product or refuse the order. Customers pay for the shipping and if products are late the shipper waives their fee; however, it cost the company $25 to restock refused and returned orders, and a 20% late penalty for accepted late orders. Refused and returned orders are then returned to stock. The company has calculated its inventory carrying rate is 28%. The business is considering switching delivery companies. If all other operating cost stay the same, given the information in the table below, calculate financial impact of on-time delivery failures. And, then determine whether the business should switch suppliers. Average on-time delivery rate Unit Shipping Cost Current 3PL Delivery Service 0.95 $18.00 New 3PL Delivery Service 0.98 $21.00