Verified Document

Innovation Distribution Co. Supply Chain Risk Case Essay

Related Topics:

Innovation Distribution Company: A Total Cost Approach Understanding Supply Chain Risk CaseThe initial purchase cost per unit paid to Dong Hai Supply is calculated as follows. The current exchange rate is 1 CNY China Yuan Renminbi = 0.14646 U.S. Dollar. As pointed out, the price per unit in Dong Hai supply is 547 ¥.

Therefore, the price per unit is 547 x 0.14646 = 80.11362.

The initial purchase cost per unit in U.S. Dollars is $80.11 (Frankel, 2013).

The average time for an order filling a TEU container to come from Dong Hai Supply in Chengdu, China to the distribution center in Alliance Fort Worth

Dong Hai Supply in Chengdu, China to the distribution center in Alliance Fort Worth

Mean

Variance

Standard Deviation

Time for processing and manufacturing order at Dong Hai

Moving Container by Rail from Chengdu to Shanghai

Loading to ship at Port of Shanghai

Pacific Ocean to Port of Long Beach

Clearing Customs and Unloading at Long Beach

Long Beach to Alliance Fort Worth

4

Total lead time for Dong Hai

43

11.9025

3.45

Actual Days for order in Transit

28

Therefore, the average time is 43 days.

ii. The average time for an order filling a TEU container to come from CousinsAg in Wahoo, Nebraska to the distribution center in Alliance Fort Worth

CousinsAg in Wahoo, Nebraska to the distribution center in Alliance Fort Worth

Mean

Variance

Standard Deviation

Time for processing and manufacturing order at CousinsAg

10

From supplier to Alliance Fort Worth

5

Total lead time for CousinsAg

15

1.2996

1.14

Actual days for order in Transit

5

Therefore, the average time is 15 days.

Question 3

The cost to ship a TEU container from Dong Hai Supply in Chengdu, China, to IDC's Alliance Fort Worth Distribution Center.

IEC charges ¥ 12,414.5 for each TEU shipped. Import tariffs and duties are $325 per TEU and shipping cost from Long Beach to AFW is $2,250.

Remember, 1 CNY China Yuan Renminbi = 0.14646 U.S. Dollar or use the $80.11 rate....

The total cost is calculated as follows:
Transportation Cost from Dong Hai Supply to Alliance Fort Worth

TEU Shipment Charge

$1,818.23

Import tariffs and duties per TEU

$325.00

Rail Shipping Cost Long Beach to AFW

$2,250.00

Total Transportation Cost

$4,393.23

Hence, the total transportation cost for shipping a TEU container from Dong Hai Supply to AFW distribution center is $4,393.23.

Question 4

Economic order quantity (EOQ) can be delineated as the inventory order quantity level that diminishes the total cost of inventory, with regard to the most significant costs, which are carrying costs and ordering costs (Coyle et al., 2016).

i. Economic Order Quantity if we purchase everything from CousinsAg

CousinsAg

Annual Demand

21,500

Ordering Cost

$105.00

Carrying Cost

32.20%

EOQ

Thus, the EOQ is 406 units

ii. Economic Order Quantity if we purchase everything from Dong Hai Supply

Dong Hai Supply

Annual Demand

21,500

Ordering Cost

$182.00

Carrying Cost

32.20%

EOQ

Thus, the EOQ is 551 units.

Question 5

As pointed out, the objective is to maintain an in-stock probability of 97.7% for customers.

i. Units of safety stock will we need to hold if we purchase everything from Dong Hai Supply

Dong Hai Supply

Standard Deviation for Topping Up

3.45

Average days for topping up

43

Deviation of everyday sales

11

Average daily sales

58.90411

Units of Safety Stock

Thus, the units of safety stock needed to be held if everything is purchased from dong Hai Supply is 431 units.

ii. Units of safety stock will we need to hold if we purchase everything from CousinsAg

CousinsAg

Standard Deviation for Topping Up

1.14

Average days for topping up

15

Deviation of everyday sales

11

Average daily sales

58.90411

Units of Safety Stock

Thus, units of safety stock needed…

Cite this Document:
Copy Bibliography Citation

Related Documents

Innovation Distribution Co Supply Chain Risk
Words: 1978 Length: 4 Document Type: Essay

A Total Cost Approach to Understanding Supply Chain Risk Using the current exchange rate, what is the initial purchase cost per unit (in U.S. dollars) paid to Dong Hai Supply? (Do not include transportation costs.) The exchange rate between the U.S. Dollar and the Chinese Renminbi is: Dollar = 6.92 CNY China Yuan Renminbi CNY China Yuan Renminbi = 0.1445 U.S. Dollar The quoted price by Dong Hai Supply at the factory is 547 China

Supply Chain and Logistics Management
Words: 3239 Length: 11 Document Type: Term Paper

Toyota Supply Chain and Logistics Management The focus of this study will be on isolation in the U.S. And Japan that are at the forefront of combining JIT practices with enterprise integration along with innovative logistics systems to get done mass customization. Among those influential in this area are Dell Computer and Miller SQA. Also looked at will be several Japanese companies including Hitachi, and other computer companies to compare these

Supply Chain Management Hypothesis Defined Concepts of
Words: 24788 Length: 80 Document Type: Thesis

Supply Chain Management Hypothesis defined Concepts of SCM and the evolution to its present day form Critical factors that affect SCM Trust Information sharing and Knowledge management Culture and Belief -- impact on SCM Global environment and Supply Chain management "Social" and "soft" parameter required for SCM Uncertainties This chapter aims to give an outline and scope of the study that will be undertaken in this work. The study lays out the issues faced by manufacturing organizations when it comes

Supply Chain Management at World
Words: 2156 Length: 7 Document Type: Research Proposal

The Japanese retail industry has intricate processes that keep demand management and inventory and production management efficient as a hybrid process that mixes automation and manual work. Given how many of the processes in the Japanese retail industry are comprised of manual and automated approaches to coordinating and communicating, it would take years for an outsider to understand how these specific processes interrelate to each other. Another factor that

Optimizing the Military Supply Chain
Words: 18803 Length: 60 Document Type: Dissertation

Improvement of Supply Chain Management Tools and Processes for Ultimate Strategic Achievement of Success in Military and Civil Business Today, both public and private sector organisations of all sizes and types are faced with the same need to optimize their supply chain management processes to the maximum extent possible in order to achieve and sustain high levels of performance and productivity. Because supply chain management systems are frequently highly complex,

Starbuck's Case Study Briefly Describe
Words: 3967 Length: 14 Document Type: Term Paper

A fourth foundational element is the strength of the Starbucks brand itself and is ubiquity globally. As a result of rapid and well-defined strategies for opening up retail stores, Starbucks is now considered one of the most preeminent and strongest brands globally. Starbucks has generated the strength of their brand through combining high-quality coffee and tea beverages with the third-place concept to generate customer loyalty and world-of-mouth among customers and their

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now