1. Eastern Electric (EE) is a major appliance manufacturer with a large plant in the Chicago area. EE purchases all the motors for its appliances from West view Motors, located near Dallas. EE currently purchases 120,000 motors each year from West view at a price of $120 per motor. Demand has been relatively constant for several years and is expected to stay this way. Each motor averages about 10 pounds in weight, and EE has traditionally purchased 3000 motors. West view ships each EE order within a day of receiving it. At its assembly plant, EE carries a safety inventory equal to 50 percent of the average demand during the lead time.

The plant manager at EE has received several proposals for transportation and must decide on one to accept. The details of the proposals are provided in the table below. Note that one cwt = 100 pounds.

Carrier	Range of Quantity Shipped (cwt)	Shipping Cost ($/cwt)
AM Railroad	200+	6.50
North East Trucking	100+	7.50
Golden Freight	50-149	8.00
Golden Freight	150-249	6.00
Golden Freight	250+	4.00

Using the information above provide an analysis for the transportation options for Eastern Electric:

Carrier	Lot Size (motors)	Transportation Cost	Cycle Inventory	Safety Inventory	In-Transit Inventory	Inventory Cost
AM Railroad	2000
North East Trucking	1000
Golden Freight	500
Golden Freight	1500
Golden Freight	2500