Q.

Calculate which mode of transport is more appropriate for Phillips Pakistan for distribution of their bulbs in Pakistan as per data given below. Rate(PKR/unit)) 0.2 0.30 0.40 2.1 Door-to-Door Transit Time (Days) 28 18 8 4 Number of shipment per year 15 30 40 60

Transport Service Rail Truck Container Air

Where R is the unit transport rate & D is the annual demand rate. Each unit is valued at PKR C, spends T days in transit during shipment. I is the annual holding rate, Q is the shipment size, C = C+R is the product value at field warehouse. Annual demand rate is your university registration number; value of each unit is the third and 4th digit of your registration number, annual holding rate is 12% per annum and shipment size is 25000 units per shipment. Calculate the following: a) Annual transport cost via each mode b) In transit inventory cost c) Average annual inventory cost at plant d) Warehouse inventory cost e) Total cost f) Recalculate and select the transportation mode if Rail rates increased by 15% due to additional surcharge applied by government, 12% increase in by truck rates due to monopoly of third parties logistics and 11% increase in container due to shortage of it after NATO supplies beginnings. Air freight rates are lowered by 2% due to reduction in oil prices. (15)

Formulae: TC = R *D ITIC = ICDT/365 PI = ICQ/2 WHI = ICQ/2