QUESTION 4 4.1 A retailer has eight stores in a region supplied from four suppliers. Trucks have a capacity of 30,000 units and cost RM500 per load plus RM150 per delivery. Thus, a truck making two deliveries that makes the total charges is RM800. The cost of holding one unit in inventory at retail for a year is RM0.25. You as a logistics manager is considering two options for shipping products as follows; 1. All shipments via distribution centre, ii) Shipping via distribution centre (DC) using milk runs, Recommend what is the suitable network to adopt if annual demand for each retailer store is 810,000 units. 4.2 Beready Company is a manufacturer of laser printer has historically purchased a thousand rollers per week from a local supplier who charges RM0.80 per roller. The purchasing manager has identified another potential source willing to supply the rollers at RM0.65 per roller. Before making his decision, the purchasing manager evaluates the performance of the two suppliers. Based on past-on-time performance, the purchasing manager estimates the detail of delivery are shown in Table 1. Table 1 Detail Current source New potential source Average lead time 2 weeks 3 weeks Standard deviation 4 weeks 1 week Minimum batches required 8,000 units 6,000 units Note: Please ignore ordering cost and focus on material cost and holding cost when making your decision. Which supplier should the purchasing manager choose? Holding cost policy is 20% of the roller price. The cycle service level is aimed at 95%. Weekly demand has a mean of 2,000 units with a standard deviation of 200 units. a