Question: based on total logistics cost, which transportation method would you select? Explain your reasoning and show calculations for all cost components, Consider the following data

based on total logistics cost, which transportation method would you select? Explain your reasoning and show calculations for all cost components,

Consider the following data for two alternative transportation modes, truck, and rail: Truck Rail Shipment Price $2000 $2700 Vehicle Capacity 3200 cases 5400 cases Max Transit Time 5 days 10 days Min Transit Time days days 4 days 8 days Average Transit Time 1 month 30.4375 days. The product to be shipped is canned fruit. The value is $20 per case. Demand for the product is 1500 cases per month. The interest rate is 25% per annum for inventory holding. We aim at providing a 95% service level. Note: Include safety stock in your calculations. Assume demand is constant. Assume lead-time is normal, which means that (practically) the range (i.e. max-min) of transit-time values will equal to 6s where s is the standard deviation of lead time.

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