Richard, a buyer at Modern Cycles, an Arkansas-based purveyor of bicycle frames for cycling enthusiasts, was...

   

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Richard, a buyer at Modern Cycles, an Arkansas-based purveyor of bicycle frames for cycling enthusiasts, was doing some number crunching. Modern Cycles was reevaluating its transportation options for a key component of the bicycle frame, the front fork. After some extensive evaluation, Richard had narrowed it down to two motor carriers and he was comparing them. Bear, Inc. was based in Conway Arkansas and Buckeye, Inc. was based in Columbus Ohio. Given the following information that Richard compiled, answer the questions below. Product weight Annual demand Order cost Price of finished bicycle frame Holding cost rate for warehouse Holding cost rate for in-transit inventory Transit times Full truck load (TL>40,000 lbs.) per ton-mile Less-than-truckload per ton-mile Distance Note: per ton-mile-2,000 pounds per mile 1) What is the EOQ? 10 72,0000 $549 $ 350 25% 15% Bear Inc. 5 days $ 0.85 $1.10 100 miles pounds per year per order per unit Buckeye Inc. 7 days $0.80 $ 1.00 100 miles 2) What is the total annual inventory cost depending on each transportation provider? (consider annual holding cost, annual ordering cost, and annual in-transit holding cost) Homework 6: Integration of transportation and inventory 3) What are the respective transportation costs for Bear Inc. and Buckeye Inc? 4) Based on the total cost (inventory and transportation) which carrier should Richard select? I Richard, a buyer at Modern Cycles, an Arkansas-based purveyor of bicycle frames for cycling enthusiasts, was doing some number crunching. Modern Cycles was reevaluating its transportation options for a key component of the bicycle frame, the front fork. After some extensive evaluation, Richard had narrowed it down to two motor carriers and he was comparing them. Bear, Inc. was based in Conway Arkansas and Buckeye, Inc. was based in Columbus Ohio. Given the following information that Richard compiled, answer the questions below. Product weight Annual demand Order cost Price of finished bicycle frame Holding cost rate for warehouse Holding cost rate for in-transit inventory Transit times Full truck load (TL>40,000 lbs.) per ton-mile Less-than-truckload per ton-mile Distance Note: per ton-mile-2,000 pounds per mile 1) What is the EOQ? 10 72,0000 $549 $ 350 25% 15% Bear Inc. 5 days $ 0.85 $1.10 100 miles pounds per year per order per unit Buckeye Inc. 7 days $0.80 $ 1.00 100 miles 2) What is the total annual inventory cost depending on each transportation provider? (consider annual holding cost, annual ordering cost, and annual in-transit holding cost) Homework 6: Integration of transportation and inventory 3) What are the respective transportation costs for Bear Inc. and Buckeye Inc? 4) Based on the total cost (inventory and transportation) which carrier should Richard select? I

Answer rating: 100% (QA)

1 What is the E O Q ANS WER EO Q 2 x 72 000 x 549 350 x 0 25 2 233 69 units EX PL AN ATION EO Q economic order quantity is calculated using the formul... View the full answer