Company XYZ a baby ware makes company servers three regions nearIowa and maintains consignment...

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Company XYZ a baby ware makes company servers three regions nearIowa and maintains consignment inventory (owned by ZZY) at eachlocation. Currently. ZZy uses refrigerated TL transportation todeliver separately to each customer. Each truck costs $700 plus$150 per stop. KAR Food is considering aggregating deliveries toIowa on a single truck. A careful study of the sales regionsrevealed three large customers, three medium-sized customers, andten small customers. Demand at the large customer is 60 tons ayear, demand at the medium customer is 24 tons per year, and demandat the small customer is 8 tons per year. Product cost for ZZZYCompany is $10,000 per ton, and it uses an annual holding cost of25 percent. Truck capacity is 12 tons.
a. What is the annual transportation and holding cost if ZZYships a full truckload to each customer when they are running outof stock?
b. What is the optimal delivery policy to each customer if ZZYCompany ships separately to each of them? What is the annualtransportation and holding cost?
c. What is the optimal delivery policy to each customer if ZZYCompany aggregates shipments to each of the three customers onevery truck that goes to Iowa? What is the annual transportationand holding cost?
d. Can you come up with a tailored policy that has lower coststhan the policies in (b) or (c)? What are the costs and inventoriesfor your suggested policy?

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What is the annual transportation and holding cost if ZZY ships a full truckload to each customer when they are running out of stock large Medium Small No of customers 3 3 10 Annual demand 60 24 8 If all 16 customers are fed by separate vehicle it will cost 700 x 16 11200 Holding Cost 10000 25 2500 Total 13700 Assume We assume that we have been asked to provide the cost of transportation and carrying cost if each customer has been taken a unit See Answer

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In: AccountingCompany XYZ a baby ware makes company servers three regions nearIowa and maintains consignment inventory...Company XYZ a baby ware makes company servers three regions nearIowa and maintains consignment inventory (owned by ZZY) at eachlocation. Currently. ZZy uses refrigerated TL transportation todeliver separately to each customer. Each truck costs $700 plus$150 per stop. KAR Food is considering aggregating deliveries toIowa on a single truck. A careful study of the sales regionsrevealed three large customers, three medium-sized customers, andten small customers. Demand at the large customer is 60 tons ayear, demand at the medium customer is 24 tons per year, and demandat the small customer is 8 tons per year. Product cost for ZZZYCompany is $10,000 per ton, and it uses an annual holding cost of25 percent. Truck capacity is 12 tons.a. What is the annual transportation and holding cost if ZZYships a full truckload to each customer when they are running outof stock?b. What is the optimal delivery policy to each customer if ZZYCompany ships separately to each of them? What is the annualtransportation and holding cost?c. What is the optimal delivery policy to each customer if ZZYCompany aggregates shipments to each of the three customers onevery truck that goes to Iowa? What is the annual transportationand holding cost?d. Can you come up with a tailored policy that has lower coststhan the policies in (b) or (c)? What are the costs and inventoriesfor your suggested policy?