Decides to use air shipments instead of ocean shipping

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Letni Corporation buys computers from Taiwan. Shipments are made by ocean carrier. It takes eight weeks for a shipment to travel from Taiwan to New York. Letni sells 510,000 computers per year. Letni buys the computers at a price of $254 per unit. Answer the following questions-

1. Determine the value of in transit (also known as pipeline) inventory value.

2. Suppose Letni Corporation decides to use air shipments instead of ocean shipping. What are the cost consequences? Describe which costs will be affected, and whether they increase or decrease (about half page)

Reference no: EM131144381

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