SuperPart an auto part distributor has a large warehouse in Istanbul region and is deciding on…
SuperPart an auto part distributor has a large warehouse in Istanbul region
SuperPart, an auto part distributor, has a large warehouse in Istanbul region and is deciding on a policy for the use of TL or TLT transportation for inbound shipping. TLT shipping costs $1 per unit. TL shipping costs $800 per truck plus $100 per pickup. Thus, a truck used to pickup from three suppliers costs 800 + 3 x 100 = $1100. A truck can carry up to 2000 units. SuperPart incurs a fixed cost of $100 for each order placed with a supplier. Thus, an order with three distinct suppliers incurs an ordering cost of $300. Each unit costs $50, and SuperPart uses a holding cost of a 20 percent. Assume that product from each supplier has annual demand of 3000 units.
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