operations management 3

 

Problem 15-1

A manager at Strateline Manufacturing must choose between two shipping alternatives: two-day freight and five-day freight. Using five-day freight would cost $147 less than using two-day freight. The primary consideration is holding cost, which is $10 per unit a year. 2,760 items are to be shipped.

Which alternative would you recommend? (Round your intermediate calculations to 2 decimal places.)

[removed] Two-day freight
[removed] Five-day freight

Problem 15-3

A manager must make a decision on shipping. There are two shippers, A and B. Both offer a two-day rate: A for $502 and B for $520. In addition, A offers a three-day rate of $470 and a nine-day rate of $401, and B offers a four-day rate of $455 and a seven-day rate of $436. Annual holding costs are 39 percent of unit price. Four hundred and ten boxes are to be shipped, and each box has a price of $144. Which shipping alternative would you recommend? (Round your intermediate calculations to 3 decimal places and final answers to 2 decimal places. Omit the “$” sign in your response.)

A

 

B

Option       Cost   Option        Cost
  2 days $ [removed]     2 days $ [removed]  
  3 days $ [removed]     4 days $ [removed]  
  9 days $ [removed]     7 days $ [removed]  

[removed] Ship two-day using A
[removed] Ship three-day using A
[removed] Ship two-day using B
[removed] Ship four-day using B
[removed] Ship seven-day using B