Kc Computers Kkc Computers - Term Paper

Excerpt from Term Paper :

Air freight costs = $6,840 + $570 = $7,410

LAX to SFO = 114 computers * 100 lbs = 11,400 lbs => 5 * 114 computers = $570

SFO to LIT = 228 computers * 100 lbs = 22,800 lbs => 30 * 228 = $6,840

2. Truck Freight Costs = $3,693

LIT to LIT = 20 units * $6/100lbs = 120

LIT to DEN = 40 * 6 + 40 * 12 = 720

LIT to MSP = 20 * 6 + 20 * 13 = 380

LIT to HUF = 15 * 6 + 15 * 9 = 225

LIT to DTW = 55* 6 + 55 * 13 = 1045

LIT to ATL = 45 * 6 + 45 * 9 = 675

LIT to HOU = 33 *6 + 33 * 10 = 528

3. Consolidation Costs = $228

4. Lost Sales = $978

Third day: LIT = 20 units * $100/unit * 0.005 = 10

Fourth day: HUF + HOU + ATL = 93 * 100 * 0.01 = $93

Fifth day: DEN + DTW = 95 * 100 * 0.05 = $475

Sixth day: MSP = 20 * 100 * 0.2 = $400

Total costs = $7,410 + $3,693 + $228 + $978 = 12,309

Alternative 2

The second alternative would be to ship by air 113 computers from Los Angeles to Little Rock and then by truck to Houston, Atlanta and Terre Haute. The remaining demand of 115 would de shipped from San Francisco to Minneapolis and then sent by trucks to Denver and Detroit, as in the map below:

Shipment one: LAX to LIT

Air transit time: 1 day

Consolidation: 1 day for all

Transit time:

LIT to LIT: 0 days for truck transit, total of 2 days

LIT to HUF: 1 day for truck transit, total of 3 days

LIT to ATL: 1 day for truck transit, total of 3 days

LIT to HOU: 1 day for truck transit, total of 3 days

1. Air freight cost, LAX to LIT = 113 * 46 = $5,198

2. Truck Freight Costs = $1,350

LIT to…

Sources Used in Document:

References: Cook, R.L., Central Michigan University, Case 8: KKC Computer Consolidation

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