Problem 1: Selecting the type of transport

Condition of the problem.

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.