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# Log Om Transportation

Submitted By Ajansen10
Words 778
Pages 4
ABC Category: Company sells 500 products, annual sales = 10 M. B&C items stored in ware house. A=top 50 selling items, ¾ of ttl sales. 2/3 of remaining are C, & account for 5% of ttl sales. T/O A=10:1, B= 4:1, C = 2:1.
Category # items % ttl sales T/O A 50 3/4= 75% 10:1 B 150 20% 4:1 C 300 5% 2:1 WH 450 25%
How many C items? B+C = 500-50 = 450 -> 2/3*450 = 300 C items
Avg Val Inv for B? Annual Sales = 100%-75%(A) – 5% (C) = 20 % (B)
20%*10M = 2M/4 =500,000
Avg Val of Inv in WH? (B= 500K) + (C=.05*10M/2=250K) = 750K
Calculate TTL cost for Shipments: Engine = 1000 lbs = 10 CWT
TTL demand CA plants 10 engine/week, 1 shpmnt per week,
Trans cost= 18 \$/cwt + 100 fixed per shpmnt
TTL annual cost of current plan?
10 eng/week * 10 cwt/engine * 18 \$/cwt + 100 \$/wk
(10*10*18 + 100) * 52 = 98,800 \$/ year
New Lrg shipment + reg Shipment? 95,160 \$/yr
Lrg: 12 \$/cwt + 200 fixed, 1 shpmnt / 4 weeks
(40 eng/4 wks *12 \$/cwt *10 cwt/eng*200/4 wks )x 52/4)=\$65,000
Reg: 5 \$/cwt + 80 fixed, 1 shpmnt/week
(10 eng/wk * 5 \$/cwt * 10 cwt/eng * 80 \$/wk) x 52wk/yr = \$30,160
Prof = Rev – Cost: Each % increase est. to increase rev 400k
Current LVL: 90%, cost = 2.5 M \$/yr Alt 1 LVL: 92%, cost = 3 M\$/yr
Alt 2 LVL: 95%, cost 4 M \$/yr Alt 3 LVL: 99%, cost = 6M \$/yr
Alt 1 Profit Increase = 2*.4 – (3-2.5) = .3 M
Alt 2 Profit Increase = 5*.4 – (4-2.5) = .5 M
Alt 3 Profit Increase = 9*.4 – (6-2.5) = .1 M
Shortest Path: A-C-D-E-F length = 17 Slvd | Nrst Unslvd | TTL Dis | Nrst | Min Dist | Path | A | C | 2 | C | 2 | A-C | A | B | 4 | B | 4 | A-B | C | D | 5 | | | | A | D | 6 | | | | B | F | 20 | | | | C | D | 5 | D | 5 | C-D | B | F | 20 | | | | C | E | 13 | | | | D | E | 12 | E | 12 | D-E | B | F | 20 | | | | E | F | 17 | F | 17 | E-F |

LOGWARE-ROUTE
Have to visit every stop: add origin->stop + stop->end

Transportation
Origins: 2: A&D, Destinations 4 (B, C, E, F)
Cost to send 10 tons from A to C: 5\$/ton * 10 tons = \$50

C3: 5 C4: 4 C5: 90 F4: 200 G10:=SUM(B10:E10)
C12: =SUM(C9:C10) C16: =C3*C9 C17: =C4*C10 F20: =SUM(B16:E17)
Excel Solver \$/unit | T1 | T2 | T3 | T4 | Supply | | F1 | 3 | 3 | 4 | 2 | 300 | | F2 | 2 | 4 | 3 | 7 | 900 | | F3 | 2 | 5 | 1 | 9 | 800 | | Demand | 400 | 300 | 900 | 400 | | row/ sum | flows | T1 | T2 | T3 | T4 | Supply | | F1 | 200 | | 300 | | 500 | 500 | F2 | | 300 | 100 | 400 | 900 | 800 | F3 | 200 | | 500 | | 800 | 700 | Demand | 400 | 300 | 900 | 400 | | | colsum | 400 | 300 | 900 | 400 | | | Cost | T1 | T2 | T3 | T4 | Supply | | F1 | 600 | 0 | 1200 | 0 | 300 | | F2 | 0 | 1200 | 300 | 2800 | 900 | | F3 | 400 | 0 | 500 | 0 | 800 | | Demand | 400 | 300 | 900 | 400 | | | | | | Total Cost | 7000 | |
How much is being sent from F2 to T3 = 100
How much is being sent from F3 to T4 = 0
Supply at F2=900, Demand at T2=300
Cost for solution = 7000, unsatisfied demand=no
Leftover supply? Yes 100 @ T2, 100 @ T3
Shipping Frequency
ORD-CA 100,000 lbs each week (1000 cwt) / inv 2.50 \$/ton @ end wk
.96 \$/cwt <1500cwt / .83\$/cwt 1500-3500cwt / .75 \$/cwt >3500cwt
Ship per week
Transport cost = 1000 cwt * .96 \$/cwt = \$960 Inv cost = 0 TTL:\$960
Ship every four weeks
Transport Cost = 4000 cwt .75 \$/cwt = \$3,000
Inv Cost = 1000 (wk1) +2000 (wk2) + 3,000 (wk3) + 0 (wk 4) = 6,000 cwt -> 6000 lbs / 2000 lbs/ton = 300 tons * 2.50 \$/ton = \$750
(3000 +750)/4 = \$937.50: Ship every four weeks (937.50 < 960)
MC/SA
Airline can lower costs by replacing 2 flights with 1 due to principle of ECONOMIES OF SCALE. Gov. control of transport industry example of REGULATION. Consolidating sm daily shipments into LRG weekly shipment DECREASES TRANSPORT COST AND INCREASES INV. COST. 20,000 lbs shipped from STL-DEN. Transport rate = 80 cents p cwt, what is cost? 20,000/100=200 cwt *.80=\$160. Shrtst path method in class will show shortest path ALWAYS. Shrtst path prob 10 nodes, 23 arcs. How many shortest paths from node 1 to node 3? MORE THAN 3

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