Question: can you answer it? salat A brick maker (BM) in Alberta mixes dry ink into its bricks to make them brown BM's demand for dry

can you answer it?

can you answer it? salat A brick maker (BM) in

salat A brick maker (BM) in Alberta mixes dry ink into its bricks to make them brown BM's demand for dry ink is 60 tons per year. Currently, BM buys the dry ink from an import merchant that buys the ink from an East Coast U.S. manufacturer. The shipments arrive in lot size of 30 tons by rail. The current cost of dry ink is CS612 22 per ton, including rail transportation cost to BM's location. BM currently keeps 6 tons of dry ink as safety stock. BM's buyer has asked the import merchant to quote a price for truck deliveries in smaller lot sizes. The merchant has quoted C5567.78 per ton for a lot size of 20 tons In the meantime, BM's buyer has contacted the manufac turer directly and asked if BM could purchase dry ink directly from the manufacturer. The answer was affirmative and the cost would be US$386.89 perton (assume USSI CS1.05). A common carrier has quoted a price of CS2.600 to haul a full truckload of dry ink (20 tons) from the manufacturer to BM's location in Alberta. The trip will take seven days. The holding cost rate for BM is 20 percent of unit cost per year for track deliveries, BM will hold only 2 tons of safety stodes. Assume 15 days per year. Which alternative has the lowest tool annual purchase transport in transit, safety stod. and average cycle od holding cost? (Hint: The value of dry ink in Alberta for calculating the safety stock and cycle stock holding cost of track deliveries should include the freight cost)

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