Problem 7 (10 marks) A parts distributor has an annual demand for machine parts of 10,000 per year with average cost of $10 per unit. There are two options for shipping this from Kuala Lumpur, Malaysia, (1) a combination of ship and train that will take 30 days at a cost of $3 per unit or (2) a combination of ship and truck that will take 20 days at a cost $4 per unit. The holding cost rate is 30% of unit cost per year. a. b. Which mode of transportation is more economical? (round to the nearest dollar) Calculate the annual total shipping costs if the parts distributor keeps a safety stock of 100 units for option (1) and a safety stock of 50 units for option (2) (round to the nearest dollar)? Problem 8- Page 677 Q8 (15 marks) 8. The following table shows orders to be processed at a machine. LO3 a. Determine the processing sequence using each of these priority rules: (1) CR, (2) MST, (3) SPT, (4) EDD. b. Determine the performance of each rule using (1) average flow time, (2) average days late. c. Is one rule superior to the others? Job Processing Time (days) Due Date (days) ABCDE 8H5T9o 10 11 285156 20 17 35