Manager has identified that a part has to be transported from China for its assembly operations. The annual demand for the part is 23,000 units. Price per unit is $ 210. Annual holding cost is 20% of the unit price. There are two options

a) Air cargo which takes 7 days and delivery cost is $ 52 per units

b) Ocean freight which takes 35 days and cost is $ 10 per unit.

Because of variability pf transportation time and demand, management decides to keep 2 weeks demand as safety stock for air cargo option and 8 weeks demand as safety stock for ocean freight option. (Use 365 days and 52 weeks per year)

Show your calculation to show which option is cheaper? (2 marks for calculating Air cargo option and 2 marks for calculating sea freight option and 1 marks for correct decision)

need urgent answer