Supreme Sound Case Study

In: Business and Management

Submitted By ryancurley
Words 1029
Pages 5
Ryan Curley
April 1, 2013
Supply Chain
Professor Power

Supreme Sound Explosion

1)
400 units needed per month

W1: delivery once a week, $832, transit time of 2 days; unit cost=$832*4=$3328/400units=$8.32/unit (origin)
W2: delivery every other week, $932, transit time of 1 day; unit cost=$932*2=1864/400units=$4.66/unit (destination)

T1: delivery once per week, $689, transit time of 5 days; unit cost=$689*4=2756/400units=$6.89/unit (destination)
T2: delivery twice a week, $669, transit time of 2 days; unit cost=$669*8=5352/400units=$13.38/unit (origin)

2) The delivery costs vary among each option due to the number of times per month that shipments are delivered. The freight cost per delivery is set and that number is then multiplied by the number of deliveries per month. This number is then divided by 400, the required number of units per month to determine the delivery cost per unit.

3) Demand is already set at 400 units per month. This means they may as well go with the most cost-efficient option. W2 and T1

4) W2: FOB destination, freight collect: If you tell the shipper that you will pay the cost when it arrives, then they will ship it "freight collect", meaning the trucking company will need a check payable to them when they deliver your item. If you have an account with a certain trucking company, then you can request that the shipper use that company so that you may be billed. It will still be "Freight Collect", but will be automatically billed to you by the company that you use.

Buyer pays freight charges
Buyer bears freight charges
Seller owns goods in transit
Seller files claims (if any)

T1: FOB destination, freight collect and allowed
Buyer pays freight charges
Seller bears freight charges
Seller owns goods in transit
Seller files claims (if any)

5) Additional issues/costs in the supply chain
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