Question: A company is considering two services for transporting goods from its plant to one of its warehouses. Service A is faster and more reliable than

A company is considering two services for transporting goods from its

A company is considering two services for transporting goods from its plant to one of its warehouses. Service A is faster and more reliable than service B. The following information is available. Demand 9600 cwt/year Service Order cost $100/order Product price (at source) $50/cwt Transit time 4 days 5 days (LT) Shipping quantity As per EOQ Std dev of LT 1.5 days 1.8 days In-transit carrying cost | 20% per year Rate $12/cwt $11.8/cwt | Inventory-carrying cost 30% per year In-stock probability during 90% lead time service level) Selling days 365 days A (Q*, ROP) control method for inventory control is used at the warehouse. Considering integrated inventory and transportations cost, which truck service should be selected? A company is considering two services for transporting goods from its plant to one of its warehouses. Service A is faster and more reliable than service B. The following information is available. Demand 9600 cwt/year Service Order cost $100/order Product price (at source) $50/cwt Transit time 4 days 5 days (LT) Shipping quantity As per EOQ Std dev of LT 1.5 days 1.8 days In-transit carrying cost | 20% per year Rate $12/cwt $11.8/cwt | Inventory-carrying cost 30% per year In-stock probability during 90% lead time service level) Selling days 365 days A (Q*, ROP) control method for inventory control is used at the warehouse. Considering integrated inventory and transportations cost, which truck service should be selected

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