Question

QUESTION 3 Bearkat Inc has an annual forecast of 25,000 units and assumes 7% when holding inventory If supplier 1 offers palm trees for $35.00 per tree and it cost $18.00 to place a purchase order with the company. In addition, the supplier can ship in quantities of 200 trees per truck at a shipment costs of $500 pet truck Use the above information to calculate the annual logistics cost (ALC) Τ Τ Τ Arial 3 (12pt) - THE

Answer 1

Answer:

Given data:

Total trees can be shipped : 200.

Average Inventory :100

Holding cost = 7% of 35 = 2.45

Total carrying cost = 100*2.45 =245.

Ordering cost /order = $18.

Total no. of order = 25000/200 = 125.

So,Total ordering cost = 125*18 = $2250.

Shipment cost /truck =500

Total orders = 125.

Total shipment cost = 500*125 = 62500.

Hence,Total annual logistics cost = 245+2250+62500 = $64995.