Group Collaboration Draft

Topics: Inventory, Currency, United States dollar Pages: 3 (804 words) Published: February 28, 2015
Q1. Using the current exchange rate, what is the initial purchase cost per unit (in US dollars) paid to Dong Hai Supply? (Do not include transportation costs)

547 Yuan x $0.14646 = $80.11

Q2. What is the average time for an order filling a TEU container to come from Dong Hai Supply in Chengdu, China to IDC’s Alliance Fort Worth Distribution Center? From CousinsAg in Wahoo, Nebraska to IDC’s Alliance Fort Worth Distribution Center?

15 + 1 + + 4 + 16 + 3 + 4 = 43 days to receive a TEU from Dong Hai Supply 10 + 5 = 15 days to receive a TEU from CousinsAg

Q3. Using the current exchange rate, what is the cost (in US dollars) to ship a TEU container from Dong Hai Supply in Chengdu, China to IDC’s Alliance Fort Worth Distribution Center?

12,414.5 x 0.14646 + 325 + 2250 = $4,393.23 to ship a TEU from Dong Hai to Fort Worth

Q4. What is the economic order quantity (use unit price only, do not include transportation costs) if we purchase everything from CousinsAg? From Dong Hai Supply?

CousinsAg price = square root [(2*21500*105) / (0.322*$85)] = 406 units Dong Hai Supply = square root [(2*21500*182) / (0.322*$80.11)] = 551 units

Q5. How many units of safety stock will we need to hold if we purchase everything from Dong Hai Supply? From CousinsAg?

Dong Hai Supply safety stock = 59 units/day x 43 days lead time = 2,537 units CousinsAg safety stock = 59 units/day x 15 days lead time = 885 units

Q6. Inventory carrying costs are based on the value of the product at the time it is held in inventory. What is the in-transit carrying cost per unit (in dollars and cents) if we purchase everything from Dong Hai Supply? From CousinsAg?

Dong Hai supply carrying cost = $80.11 x 0.322 = $25.80
CousinsAg carrying cost = $85 x 0.322 = $27.37

Q7. What average inventory level (in units) will we hold at the IDC’s Alliance Fort Worth Distribution Center if we purchase everything from Doug Hai Supply? (Be sure to consider both safety...
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