Reference no: EM131462963

You oversee the transport of wine from Valparaiso, Chile to Chicago, USA for your company. The wine is produced and in bulk in Maipo. The bulk wine is transported in TEU containers that carry up to 22000 liters of wine each. Currently you order one full container for each order to "weigh out" the container.

The annual demand for wine is 130000 liters with standard deviation 19500. The wine costs $20 per liter. The sales price is $40 per liter. It costs $1800 per order, and the holding charge rate is 0.1. Assume that there are 315 days per year. The cycle service level is 90%.

Moving from Maipo to Valparaiso costs $66 and takes 2 day(s). It takes 13 days before it is shipped out of Valparaiso to USA. It costs $830 and takes 13 days to ship from Valparaiso to Newark and costs $450 and takes 10 days to ship from Valparaiso to Houston. The cargo takes 3 day(s) to leave the Newark port and 5 day(s) to leave the Houston port.

There are both truckload (TL) and Intermodel (IM) options for inland transportation. Going from Newark to Chicago by truckload costs $1440 and takes 3 day(s), or by intermodal costs $1170 and takes 2 day(s); Houston to Chicago by truckload costs $1860 and takes 5 days, or by intermodel costs $1380 and takes 6 days. All prices are for moving one container.

1. What is the shortest time in days to ship the wine?
2. What is the lowest possible transportation cost per a 1000 liter?
3. What is the ordering cost of path D?
4. What is the cycle stock cost of path D?
5. What is the safety stock cost of path D?
6. What is the pipeline cost of path D?
7. Across the four path options what is the lowest total logistic cost per a 1000 litter of wine?