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Emery Assignment Global Logistics

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Submitted By Sarik777
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Global Logistics – INTL222-001
Emery Assignment Alternative
18 November 2015

I am about to ship precision instruments on 1 pallet. The cost of the goods is $2, 000, 000, 00. The interest rate is 6%. The trip takes 1 day by air and the air freight carrier will charge $4,500.00. The trip takes 21 days by marine vessel and will cost $300. The cost of lost interest over the length of the transit time (opportunity cost) needs to be factored into the total cost of transportation for each mode. Hint: first calculate the cost of lost interest per day. 1. What is the difference in “Total Cost” between the 2 methods excluding duty and tax which would be the same in either case? (Show your work).
(2,000,000.00 x 0.06)365 = 328.77$ Interest per day

2,000,000.00 + 328.77 + 4,500.00 = 2,004,828.77$ Total Cost by Air
2,000,000.00 + 328.77 (21) + 300.00 = 2,007,204.17$ Total Cost by Marine Vessel

2,004,828.77 - 2,007,204.17 = 2,377.40$ Difference in cost between Air & Marine

2. How many days do the goods have to travel by marine vessel before the cost of the 2 modes of transport is roughly equal?

2,007,204.17 / 21 = 95,581.15$
2,004,828.77 / 95,581.15 = 20.97 Days

3. Which transport method do you recommend?
I suggest transporting the item via air, because it will take less time which is 1 day versus 21 days and cheaper for 2,377.40$ in compare to shipping it via marine vessel.

Prepare a brief report to submit by the end of class formatted with an introduction, body and conclusion answering the questions above.

The air and marine modes of transportation play very important role in logistics, because the most important attribute in transportation of goods is definitely a cost of freight whether via air or marine. The shipper tries to ensure lowest possible cost for shipment but also considers the transit time. Sometimes it is important to

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