Kazakh company has assembly plant in South-East Asia. A wide range of component parts regularly sent from Kazakhstan assembly plant. In this case, the question often arises: how to transport cargo – by air or by sea?

Factors that play a decisive role in choosing between air or sea transport are:

- Freight rate during transportation by sea - 250 USD for 1 m3;

- Freight rate for air transport - 1154 USD for 1 m3;

- Journey time for the carriage of sea transportom1 - 50 days;

- Journey time for the carriage of air transportom2 -10 days;

- Additional insurance stocks on the assembly business in the case of transport by sea - 14 days;

- The interest rate on the stocks of goods in transit during transportation by sea and air - 7% per annum;

- Additional costs for the assembly business reserves - 15%.

In our example, the freight rate air transport is higher than on the sea. However, air transport products in the path is not as long as in the waterway, so the cost of interest in connection with resources in transit and insurance stocks on the stock assembly business below.

Determine what type of transportation will choose the company at a specific value of the goods, equal to 5 000 USD, 10 000 USD, 50 000 USD.

Problem 2: selecting suppliers

Condition of the problem.

Kazakh company specializes in the production of household appliances and it’s regularly confronted with the question of where to buy component parts - in Kazakhstan or in Southeast Asia? For example, in the case of shipments from Southeast Asia to overcome long distances than with shipments from Kazakhstan. Transportation costs will be significantly higher and longer periods require additional transportation stocks in supply chain and additional insurance stocks to ensure uninterrupted production. Moreover, products from the region of Southeast Asia is subject to import duties. Table. 7.1 lists additional factors that arise when shipped from South-East Asia.

Table 7.1

Additional factors that arise when products are shipped from the region of Southeast Asia *

Factor’s name	Value
Cargo transportation tariff by sea	150 USD for 1 m3
Import fee on the import of goods	12%
Interest rate on reserves: On the move Insurance	10% 10%
Transport duration	25 days
Additional insurance reserves completing the recipient	7 days

The unit cost (price) of goods is 4 000 USD, 6 000 USD, 8 000 USD, 10 000 USD, 12 000 USD per 1 m³.

Price components in Kazakhstan is 20% higher than in the region of Southeast Asia, and their quality is the same.

Based on these factors and the specific value of the goods to determine the additional costs arising from the shipments from Southeast Asia. Comparing costs for the purchase of components in Kazakhstan and in Southeast Asia, to choose a supplier of goods.

Problem 3. Selection of containers for transportation of products
Condition of the problem.

Products are transported in standard containers in boxes or trays. If trays are used, it fits 300 pieces into the container (25 pallets in one container 12 on a pallet of products). If boxes are stacked, fit 480 products in a container (40 boxes in one container 12 of products in a single box).
Transportation costs per container:

-During transportation to 100-249 km - 500 USD,
-During transportation to 250-499 km - 800 USD,
-During transportation to 500-999 km - 1200 USD,
-During transportation to the 1000-1999 km - 2000 $,
-During transportation for 2000 km or more - 3000 $
The hourly rate of loading and unloading (RRP):
-Manual - 36 USD,
-Fork lift - 54 USD The costs of the working time for loading:
-One pallet: manually - 4.8 minutes, fork lift - 2.4 minutes;
-One box: Manual - 1.8 m, fork lift - 0.9 min.
Necessary to determine the costs per pallet, and one box for transportong products in each of these distances, based on calculations - choose the most efficient type of packaging.

Problem 4. Choice of logistic schemes of delivery of goods depending on the time of their promotion

Condition of the problem

1. The quantity of the product is fairly stable and has regular character.

2. The volume of sales is following:

-USD 40 million, or 80 thousand. Units sold per year;

-USD 30 million, or 60 thousand. Units sold per year;

-USD 25 million, or 50 thousand. Units sold per year;

-USD 12.5 million, or 25 thousand. Units sold per year. Sale of goods is carried out uniformly by the day.

3. Alternative schemes of delivery of goods:

a) Transportation by aircraft in small containers to the point of retail sale;

b) Carriage by road in small containers to retail locations;

c) Transportation by road in large containers to the point of retail trade;

g) Transportation by rail in large containers to the warehouse and from small lots to retail locations.

4. Time spent in transit by air:

-The processing of applications - 5 days;

-Time - 1 day;

-While in the retail location - 2 days.

5. Time spent in transit by road transportation in small containers:

-The processing of applications - 5 days;

-Time - 2 days;

-While in the retail location - 2 days.

6. Time spent in transit by road transportation in large containers:

-The processing of applications - 5 days;

-Time - 2 days;

-While in the retail site - 8 days.

7. The time spent for the rail transportation in large containers to the warehouse and then in small batches:

-The processing of applications - 5 days;

-Time - 4 days;

-Time Spent in stock - 10 days;

-Time spent at retail locations - 5 days.

8. Specific fare:

a) on sales of 40 million USD, or 80 thousand. units;

-During transportation by aircraft - 3.33 USD .;

-During transportation by cars in small containers - 2.70 USD .;

-During transportation by car in large containers - 1.58 USD .;

-Rail transportation - 0.19 USD .;

b) on sales of 30 million USD, or 60 thousand. units:

-During transportation by aircraft - 4.10 USD .;

-During transportation by cars in small containers - 3.31 USD .;

-During transportation by car in large containers - 2.34 USD .;

-Rail transportation - 1.14 USD .;

c) on sales of 25 million USD, or 50 thousand. units:

- During transportation by aircraft - 4.54 USD .;

- During transportation by cars in small containers - 3.65 USD .;

- During transportation by car in large containers -2.83 USD .;

- Rail transportation - 1.74 USD .;

g) on sales of USD 12.5 million, or 25 thousand. units:

- During transportation by aircraft - 5.65 USD .;

- During transportation by cars in small containers - 5.37 USD .;

- During transportation by car in large containers -5.13 USD .;

- Rail transportation - 4.09 USD

The interest rate on the value of the inventory is 10% per annum.

The cost of one unit of the commodity is 500 USD

Define:

1) annual turnover or the number of flights for each scheme and each delivery sales;

2) the amount of inventory, or the average size of deliveries for reys1;

3) the cost of transportation for each flight mode of transport for each sales;

4) total costs per flight on delivery of goods for each of the alternative schemes of delivery, including the cost of inventory;

5) rational scheme of delivery of goods for each sales.