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5. What is the total cost (ordering, inventory carrying, safety, pipeline, shortage, and transportation costs) for the air and motor carrier? a.
5. What is the total cost (ordering, inventory carrying, safety, pipeline, shortage, and transportation costs) for the air and motor carrier? a. Which alternative should BBE use?
Extra Credit (%age of the points affecting final total grade)
1. Consider negotiating an improvement in the air carrier service. What should be the expected cases short each cycle by air, for air to be the preferred mode? (1%)
2. Jans Mertens, the EVP of SCM is unhappy with the low customer service arguing that the stockout cost/ unit vastly undervalues the cost of each unit short. Jans has asked you to calculate a stockout cost/unit that would put the PNS service at 90%, 95% and 98%. (2%)
3. Based off these new service levels what is the ROP for the: a. Air carrier (1%) b. Motor Carrier (1%)
