A is more economical with a daily cost of enter your respon

A) ___is more economical, with a daily cost of $____ (enter your response as a whole number)

B) What production issues are not included in the data presented?

Monczka-Trent Shipping is the logistics vendor for Handfield Manufacturing Co. in Ohio. Handfield has daily shipments of a power-steering pump from its Ohio plant to an auto assembly line in Alabama. The value of the standard shipment is $250,950. Monczka-Trent has two options: (1) its standard 2-day shipment or (2) a suboontractor who will tean drive overnight with an effective delivery of 1 day. The extra driver costs $100. Handfield\'s holding oost is 35% annually for this kind of invontory

Solution

Answer A:-

The holding cost for Handfield Manufacturing Co. is 35% annualy.

Daily holding cost = 250950*35%*(1/365)= $241

The extra cost for the driver = $190

The benefit to subcontractor the work where the team will drive overnight with an effective delivery of 1 day =$241-$190= $51

so, __faster shipping option with a sub-contractor_is more economical,

AnswerB:-

The production issue that has not been included in the above data is that the auto assembly line in Alabama is getting its input from the Ohio plant of power steering pump, thus any changes in the delivery pattern i.e. changing the duration of shipment might affect the workings of the assembly line as 1 day shipment may lead to over stocking at the assembly line. The delay in transit time could lead to production issues where this part or component is used. These issues could be related to new product development, quality or testing of a product. It could also affect the production process and inventory levels. All of these could cause potential delays in production.