Question: Your analysis will determine if it is worth it. Throughout the world there are only two sources of Schachtel Schmuggel Bannware: CousinsAg , a domestic
Your analysis will determine if it is worth it. Throughout the world there are only two sources of Schachtel Schmuggel Bannware:
- CousinsAg, a domestic supplier located in Wahoo, Nebraska
- Dong Hai Supply, an international supplier located in Chengdu, China
Throughout this turnaround, we will ship utilizing Twenty-foot Equivalent Units (TEUs) from each location. Assume the following for all questions:
- Projected Annual Demand is 21,500 units
- There are 365 days in a year
- All product will be shipped to a distribution center in Alliance Fort Worth (AFW) where we will service our customers needs
- Inventory carrying cost is 32.2%
- A TEU container can hold up to 600 units of our product.
- The average labor rate in Chengdu is 10.36 Yuan per hour. The average labor rate in Wahoo, Nebraska is $25.30 per hour.
- Today's exchange rate is 1 CNY China Yuan Renminbi = 0.14646 US Dollar
- The Harris EOQ formula is Q* = SQRT((2*Annual Demand*Ordering Cost)/(Inventory Carrying Cost*Unit Price))
- Our goal is to maintain a 97.7% service level.
- We have a deviation in daily sales of 11 units.
- We cannot buy or hold fractional units of a product
Inventory Carrying Costs are based on the value of the product at the time it is held in inventory. We own the product when it leaves the supplier's dock -- not when we place the order. What is the IN-TRANSIT CARRYING COST PER UNIT (in dollars and cents) if we purchase everything from Dong Hai Supply? [Assume duties and tarriff costs are incurred after delivery]
Group of answer choices
$0.3749 per unit
$0.5827 per unit
$0.3303 per unit
$0.2741 per unit
$1.9789 per unit
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
