Question 9 (10 points): Given the following shipper and transportation condition

Question

Question 9 (10 points): Given the following shipper and transportation conditions . Shipper: 1,000 tons 10% Annual use rate: o o .Commodity Cost of capital: o Aluminum pipes o Value: 1,200 per ton o Shipment distanc 500 miles Mode characteristics: Rate/Ton-Mile Shipment Size (tons) Transit time (days) Ra Truck 10 .16 200 20 20 5 a) Between rail and truck, what seems to be the logical mode choice and why? b) Ifrail requires 20 days of safety stock at all times and truck requires 0, does your answer change?

Explanation / Answer

Answer : a) Between Rail and Truck , Rail is the best logical choice than Truck . Because

(i) Rate/Ton-Mile for Rail < Truck.

(ii) Shipment size for Rail > Truck.

(iii) Here the main logic is that transit time for rail is 20 days, i.e., Rail takes 20 days to transit 200 tons where only 20 tons to transit Truck requires 5 days . That means if truck transit 200 tons then it needs

(5 × 200) / 20 = 50 days where Rail takes only 20 days. Therefore, Rail is logically chosen.

b) No, my answer will not be changed. Because to transit anything to anywhere its need sometimes (less or more) but in the question it is given that Truck takes 0 times this means Truck is not going to transit. In that case I have only one option and that is Rail. Hence my answer is not changing.

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.