Week2 Assigment

p Annual cost RC D /Q Q /2 S Transportation of single truck to all suppliers no . of s per year

Annual cost 300 9000 /735 735 /2 10 1100 12 .2

Annual cost 20768

Annual cost per product 6923

Time between s T Q /D

T 735 /9000

T 0 .082 years or 0 .98 months (e ) What is the shipping policy you recommend if each product has an annual demand of 3 ,000 ? What is the shipping policy you recommend for products with an annual demand of 1 ,500

? What is the shipping policy you recommend for products with an annual demand of 18 ,000

The shipping policy that I would recommend if each product has an annual demand of 3000 units is LTL shipping . This is because it leads to the lowest annual costs and handles the s efficiently

With an annual demand of 1500 units of each product , the optimal quantity is equal to 520 units . Therefore since there are lesser units demanded and ed , hence the policy taking the per unit cost transportation policy would be useful . Hence the LTL shipping policy would lead to lower costs

LTL shipping

Annual cost RC D /Q Q /2 S Transportation per unit no . of s per year

Annual cost 300 1500 /520 520 /2 10 520 1 2 .9

Annual cost 4973

TL shipping Annual cost RC D /Q Q /2 S Transportation of single truck to all suppliers no . of s per year

Annual cost 300 1500 /520 520 /2 10 1100 2 .9

Annual cost 6835

With an annual demand of 18000 units of each product , the optimal quantity is equal to 1800 units . This is because if demand increases by a factor of 6 , the optimal quantity increases by a factor of sqrt of 6...