What is the economic order quantity for bbe in units

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Reference no: EM133335251

Assignment:

The fifth case study is Case 9.2 Baseball Card Emporium from your textbook. This case study explains baseball card resellers, and you are to calculate the economic order quantity (EOQ) and determine the proper transportation for their goods. You are to read this case study and answer all five questions. It is expected that you use the strategies located within your textbook when answering these questions. It is also expected that you properly conduct research to add an additional dimension on top of your textbook readings to properly answer each of these questions.

Case. Baseball Card Emporium

Baseball Card Emporium (BBE) of Lewistown, Pennsylvania, is a distributor of baseball cards to sports card retailers. Its market area encompasses most of Pennsylvania, eastern Ohio, and New Jersey. The cards are printed in Neenah, Wisconsin, and currently shipped to Lewistown via motor carrier transportation. Kenny Craig, vice president of logistics, has asked his staff to evaluate using air carrier service to ship the cards.

Nick Gingher, director of distribution, has collected the following information:

Annual demand: 6,000 cases of cards

Case value (price): $96 each

Inventory carrying cost (annual): 30%

Cost per order to replenish inventory: $75

In-transit inventory carrying cost: 18%

Transit time using motor carrier (parcel ground): 4 days

Cycle time using motor carrier (parcel ground): 7 days

Transit time using air carrier: 1 day

Cycle time using air carrier:2 days

Motor carrier rate: $1.20 per cwt. (100 lbs.)

Air carrier rate: $2.50 per cwt.

Unit weight: 50 lbs. per case

Case Questions

1.What is the economic order quantity for BBE in units? In pounds?

2.What is the total cost (not considering transportation-related costs) of the EOQ?

3.What is the total cost for using motor carrier transportation?

4.What is the total cost for using air carrier transportation?

5.Which alternative should BBE use?

Reference no: EM133335251

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