In a study about pregnant women’s use of tobacco, the nurse…

Questions

Questiоn 5: [24 pоints]  Green Industries purchаses twо components, C1 аnd C2, from its first-tier suppliers locаted in Pensacola and South Bend, respectively, for two of its assembly plants in Portland and Seattle. The assembly plants operate 360 days a year to assemble a product that requires one unit of each of the components C1 and C2. The assembly plant in Portland makes 50 products per day, whereas the plant in Seattle makes 75 products per day. The products made in Portland are sold overseas, and, hence, an additional unit of component C1 has to be included in the package of the product as a spare part. Green Industries incurs an inventory holding cost of $0.8/day/unit in the assembly plants in Portland and Seattle. A. [12 points] Currently, Green Industries uses a trucking company headquartered in Pensacola to pick up the components from the supplier plants to deliver to the assembly plants. Under the current network configuration, direct shipments are made using optimal shipment quantities. Trucks used have a capacity of 1,500 units (of either component) and cost $3,000 per shipment. The in-transit inventory holding cost is $0.6/day, and each route takes 5 days to complete. What are the total annual transportation, in-transit inventory holding, and on-site inventory holding costs? B. [12 points] The trucking company is concerned about the underutilization of the existing capacity, and wonders if Green Industries would agree to a milk-run delivery scheme using dedicated trucks for each assembly plant and optimal shipment quantities. Under this policy, a truck dedicated to Portland would pick up C1 from Pensacola, then C2 from South Bend, and deliver both to Portland. Similarly, a truck dedicated to Seattle would pick up C1 from Pensacola, then pick up C2 from South Bend, and deliver both to Seattle. It would take 2 days from Pensacola to South Bend, 5 days from South Bend to Portland, and 5 days from South Bend to Seattle. The same type of truck would be used for both routes, with a capacity of 1,500 units (regardless of component type) and a cost of $3,000 per shipment. What are the total annual transportation, in-transit inventory holding, and on-site inventory holding costs?