1. For style A Shades;
1 shade is packed in a box of 12 by 12 by 12 inches
Converting the inches into feet (12 in = 1 ft)
After package, 1 Style A shade occupies a volume of 1ft by 1ft by 1 ft (=1ft3)
When loaded into the intermodal container;
The container accommodates a maximum of 8 Style A boxes (width) by 8 boxes (height) by 40 boxes (length). Total number of boxes = 8 × 8 × 40 = 2560.
Therefore, 2560 style A shades can be loaded into an intermodal container.
2. For style B Shades;
1 package of 6 shades measures 12 by 12 by 48 inches (1ft × 1ft × 4ft)
The intermodal container accommodates a maximum of 8 packages (width) by 8 packages (height) by 10 packages (length). The total number of packages = 8 × 8 × 10 = 640.
Total number of style B shades = 6 × number of packages = 6 × 640 = 3840.
3. For Style C Shades;
1 package of 10 shades measures 12 by 12 by 50 inches (1ft × 1ft × 4.16667ft)
The intermodal container accommodates a maximum of 8 packages (width) by 8 packages (height) by 40/4.16667 packages (length). The total number of packages = 8 × 8 × 40/4.16667 = 614.
Total number of style C shades = 10 × number of packages = 10 × 614 = 6140.
4. For Style A;
The cost of 1 packaged shade = $4 + 0.6 = $4.6.
Total cost of manufacturing and packaging = $4.6 × 2560 = $11,776
Weight of 1 packaged shade = 10 pounds
Total weight = 10 × 2560 = 25,600 pounds
Transportation costs
Land rate = $1000
Ocean rates = $22 × (25,600/2000) = $281.6
Total costs = $11,776 + $1000 + $281.6 = $13,057.6
Insurance cost = 2% of $13,057.6 = $261.152
Total costs including insurance = $13,318.752
In order to deliver the required 5,400 shades, three trips must be made. This costs $13,318.752 × 2 = $26,637.504 for the first two trips.
For the third trip, only 280 shades would be delivered.
Production and packaging costs of 280 shades = $4.6 × 280 = $1,288.
Total weight = 10 × 280 = 2,800 pounds.
Transportation costs
Land rate = $1000
Ocean rates = $22 × (2800/2000) = $30.8
Total costs = $1,288 + $1000 + $30.8 = $2,318.8
Insurance cost = 2% of the total costs
Total costs including insurance = $(2,318.8 × 1.02) = 2,365.176
Total costs of delivering 5400 Style A shades = $26,637.504 + $2,365.18 = $29,002.68
5. For Style B
Production cost of 1 package of six shades = $(6 × 5) + 2 = $32.
Total production cost of 640 packages (3840 shades) = $32 × 640 = $20,480
Weight of 1 package of six shades = 62 pounds
Total weight of 640 packages (3840 shades) = 640 × 62 = 39,680 pounds.
Transportation costs
Land rate = $1000
Ocean rates = $22 × (39,680/2000) = $436.48
Total costs = $20,480 + $1000 + $436.48 = $21,916.48
Insurance cost = 2% of total costs
Total costs including insurance = $(21,916.48 × 1.02) = $22,354.81
In order to deliver the required 5,400 shades, two trips must be made.
For the second trip, the number of shades delivered = (5400 - 3840) = 1560.
Production and packaging costs of 1560 shades (260 packages) = $32 × 260 = $8320.
Total weight of 260 packages (1560 shades) = 260 × 62 = 16,120 pounds.
Transportation costs
Land rate = $1000
Ocean rates = $22 × (16,120/2000) = $177.32
Total costs = $8320 + $1000 + $177.32 = $9497.32
Insurance cost = 2% of total costs
Total costs including insurance = $(9497.32 × 1.02) = $9687.27
Total costs of delivering 5400 Style B shades = $22,354.81 + $9687.27 = $32,043.08
6. For Style C
Production cost of 1 package of ten shades = $(6 × 10) + 3 = $63.
Total production cost of 614 packages (6140 shades) = $63 × 614 = $38,682.
However, the total number of shades required is 5400.
Total production cost of 540 packages (5400 shades) = $63 × 540 = $34,020.
Weight of 1 package of ten shades = 101 pounds
Total weight of 540 packages (5400 shades) = 540 × 101 = 54,540 pounds.
Transportation costs
Land rate = $2000 (the total weight of 54,540 pounds is above the required maximum of 44,000 pounds, thus must be transported in two trips).
Ocean rates = $22 × (54,540/2000) = $599.94
Total costs = $34,020 + $2000 + $599.94 = $36,619.94
Insurance cost = 2% of total costs
Total costs including insurance = $(36,619.94 × 1.02) = $37,352.34
I would recommend Style A shades. Despite the highest number of trips made (three trips), the cost of producing and delivering Style A shades is still the lowest ($29,002.68). For Style B shades, the total cost of production and delivery is $32,043.08 while that of Style C shades is $37,352.34. If delivery time was a major factor, then the product with the smallest trips would be appropriate. However, in this case, cost is the major factor, and the product with the lowest cost is the most appropriate.
Reference
Murphy, P. R., Jr., & Wood, D. (2010). Contemporary Logistics: International Version. 10th ed. Pearson.
