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5. Use Scenario 14.1 to determine the in-transit inventory cost of the Anita Enterprises option if the Onion Shack purchases 240,000 bags of Vidalia onions each year.

5. Use Scenario 14.1 to determine the in-transit inventory cost of the Anita Enterprises option if the Onion Shack purchases 240,000 bags of Vidalia onions each year.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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When Vidalia onions are ready, the entire 13 county (plus parts of seven other counties) area in Georgia where they are grown is devoted to the harvest, packaging and shipping of this delicacy. The Onion Shack currently purchases 120,000 bags of onions each year at a price of $100 per bag (a bag is ten pounds). Onion Shack has historically purchased in lots of 3000 bags. Transit time and capacity vary as indicated in the table. The safety inventory that Onion Shack requires is 30% of lead time demand and the holding cost for a bag is 15% of cost. Carrier Mashburn Rail Sylvia Express Anita Enterprises Smith Trucking Quantity Shipped (cwt) 200+ 100+ 250+ 250+ B) $2004.60 C) $1972.60 D) $1864.60 Quantity shipped Shipping cost Transit time (S/cwt) (days) $2.10 5 3 3 3 (bags) 2000+ 1000+ 2500+ 2500+ $2.35 $1.35 $1.00 5. Use Scenario 14.1 to determine the in-transit inventory cost of the Anita Enterprises option if the Onion Shack purchases 240,000 bags of Vidalia onions each year. A) $1936.60
Transcribed Image Text:When Vidalia onions are ready, the entire 13 county (plus parts of seven other counties) area in Georgia where they are grown is devoted to the harvest, packaging and shipping of this delicacy. The Onion Shack currently purchases 120,000 bags of onions each year at a price of $100 per bag (a bag is ten pounds). Onion Shack has historically purchased in lots of 3000 bags. Transit time and capacity vary as indicated in the table. The safety inventory that Onion Shack requires is 30% of lead time demand and the holding cost for a bag is 15% of cost. Carrier Mashburn Rail Sylvia Express Anita Enterprises Smith Trucking Quantity Shipped (cwt) 200+ 100+ 250+ 250+ B) $2004.60 C) $1972.60 D) $1864.60 Quantity shipped Shipping cost Transit time (S/cwt) (days) $2.10 5 3 3 3 (bags) 2000+ 1000+ 2500+ 2500+ $2.35 $1.35 $1.00 5. Use Scenario 14.1 to determine the in-transit inventory cost of the Anita Enterprises option if the Onion Shack purchases 240,000 bags of Vidalia onions each year. A) $1936.60
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