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CASE 9-2
CASE 9-2: BASEBALL CARD EMPORIUM
DATA
R 6,000 units Annual demand, cases of cards
V $ 96 Case Value Price
W 30% Inventory carrying cost
A $ 75 Cost per Order to replenish inventory
Y 18% In Transit inventory carrying cost
Motor transit time (MTT) 4 Transit Time using motor carrier
Motor cycle time (MCT) 7 days Cycle Time using motor carrier
Air transit time (ATT) 1 days Transit Time using air carrier
Air cycle time (ACT) 2 days Cycle time using air carrier
Freight Motor 1.20 per unit Motor carrier rate per cwt (100 lbs.)
Freight Air $ 2.50 per unit Air carrier rate per cwt (100 lbs.)
Weight 50 pounds Unnit Weight per case
S=VW $ 29 Inventory carrying cost per unit per year ($ per unit per year)
Motor cwt 0.60
Air cwt 1.25
Days per year 365
Order Cycle (OC) dias (Days per year*Q)/R
QUESTION 1: EOQ for Nittany Fans in units? In pounds?
Q = SQRT (2RA/VW)
Q= units
Q= pounds
QUESTION 2: Total Cost (not considering transportation-related costs) of the EOQ
TAC = (½)* QVW + AR/Q
TAC=
QUESTION 3: Total Cost for using motor carrier transportation
TIC motor carrier = ½ QVW + AR/Q +(MTT/OC)*QVY
TAC motor = TIC Motor + Motor cwt * R
TIC motor=
TAC motor=
QUESTION 4: Total Cost for using air carrier transportation
TIC air = ½ QVW + AR/Q + (ATT/OC)*QVY
TAC air = TIC air + Air cwt * R
TIC air=
TAC air=
QUESTION 5: Which alternative should BBE use?
Please put a check mark in your recommendation
Air Carrier
Motor Carrier
&RRomero &P
Sheet3
Sheet1
VW
RA
Q
2
=
Q
R
A
QVW
TAC
+
=
2
1
MBD0175872C.unknown
MBD017593E0.unknown
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