Altogether, concerning the existing holding cost, annual demand, and cost per box, the optimal number of boxes is 80. It will meet the companys requirements and satisfy buyers demands. The shoe department buyer at Feets must now choose between shipping vendors from the port of entry (Oakland, CA) to the warehouse in Sacramento, CA. There are two viable alternatives from two different vendors: 2day freight and 5day flat rate freight. The rates for 2day freight are $13.562 per shipping box; and for 5day freight, there is a flat $1,500 per order for any size order up to 123 boxes. The annual percentage holding cost is 35%. Which alternative would you recommend, and why? What is the total annual shipping cost?

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Which Alternative Would You Recommend, and Why?

To conclude about the beneficial character of one or another vendor, it is critical to compare final prices:

Vendor 1 (2-day freight) = $13.562×80 boxes = $1084.96
Vendor 2 (5-day freight) = $1,500 (it is fixed by the terms)

In such a way, having compared the two prices, it is possible to recommend the use of the first vendor’s services (2-day freight) as the final expenses are lower ($1084.96 compared to $1,500).

What is the Total Annual Shipping Cost?

The annual shipping cost can be calculated using the formula:

Annual shipping cost= costs of using vendor’s 1 freight per order×Number of orders per year

Number of orders per year = Annual demand/Optimal number of boxes per order (Q) = 9,800 boxes/80 boxes = 122.5 (123) orders.

In such a way:

Annual shipping cost = costs of using Vendor’s 1 freight per order×Number of orders per year = $1084.96×123 orders = $133450.08

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Academic.Tips. (2021) 'Altogether, concerning the existing holding cost, annual demand, and cost per box, the optimal number of boxes is 80. It will meet the companys requirements and satisfy buyers demands. The shoe department buyer at Feets must now choose between shipping vendors from the port of entry (Oakland, CA) to the warehouse in Sacramento, CA. There are two viable alternatives from two different vendors: 2day freight and 5day flat rate freight. The rates for 2day freight are $13.562 per shipping box; and for 5day freight, there is a flat $1,500 per order for any size order up to 123 boxes. The annual percentage holding cost is 35%. Which alternative would you recommend, and why? What is the total annual shipping cost'. 22 June.

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Academic.Tips. (2021, June 22). Altogether, concerning the existing holding cost, annual demand, and cost per box, the optimal number of boxes is 80. It will meet the companys requirements and satisfy buyers demands. The shoe department buyer at Feets must now choose between shipping vendors from the port of entry (Oakland, CA) to the warehouse in Sacramento, CA. There are two viable alternatives from two different vendors: 2day freight and 5day flat rate freight. The rates for 2day freight are $13.562 per shipping box; and for 5day freight, there is a flat $1,500 per order for any size order up to 123 boxes. The annual percentage holding cost is 35%. Which alternative would you recommend, and why? What is the total annual shipping cost? https://academic.tips/question/altogether-concerning-the-existing-holding-cost-annual-demand-and-cost-per-box-the-optimal-number-of-boxes-is-80-it-will-meet-the-companys-requirements-and-satisfy-buyers-demands-the-shoe-depart/

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Academic.Tips. 2021. "Altogether, concerning the existing holding cost, annual demand, and cost per box, the optimal number of boxes is 80. It will meet the companys requirements and satisfy buyers demands. The shoe department buyer at Feets must now choose between shipping vendors from the port of entry (Oakland, CA) to the warehouse in Sacramento, CA. There are two viable alternatives from two different vendors: 2day freight and 5day flat rate freight. The rates for 2day freight are $13.562 per shipping box; and for 5day freight, there is a flat $1,500 per order for any size order up to 123 boxes. The annual percentage holding cost is 35%. Which alternative would you recommend, and why? What is the total annual shipping cost?" June 22, 2021. https://academic.tips/question/altogether-concerning-the-existing-holding-cost-annual-demand-and-cost-per-box-the-optimal-number-of-boxes-is-80-it-will-meet-the-companys-requirements-and-satisfy-buyers-demands-the-shoe-depart/.

1. Academic.Tips. "Altogether, concerning the existing holding cost, annual demand, and cost per box, the optimal number of boxes is 80. It will meet the companys requirements and satisfy buyers demands. The shoe department buyer at Feets must now choose between shipping vendors from the port of entry (Oakland, CA) to the warehouse in Sacramento, CA. There are two viable alternatives from two different vendors: 2day freight and 5day flat rate freight. The rates for 2day freight are $13.562 per shipping box; and for 5day freight, there is a flat $1,500 per order for any size order up to 123 boxes. The annual percentage holding cost is 35%. Which alternative would you recommend, and why? What is the total annual shipping cost?" June 22, 2021. https://academic.tips/question/altogether-concerning-the-existing-holding-cost-annual-demand-and-cost-per-box-the-optimal-number-of-boxes-is-80-it-will-meet-the-companys-requirements-and-satisfy-buyers-demands-the-shoe-depart/.

Bibliography

Academic.Tips. "Altogether, concerning the existing holding cost, annual demand, and cost per box, the optimal number of boxes is 80. It will meet the companys requirements and satisfy buyers demands. The shoe department buyer at Feets must now choose between shipping vendors from the port of entry (Oakland, CA) to the warehouse in Sacramento, CA. There are two viable alternatives from two different vendors: 2day freight and 5day flat rate freight. The rates for 2day freight are $13.562 per shipping box; and for 5day freight, there is a flat $1,500 per order for any size order up to 123 boxes. The annual percentage holding cost is 35%. Which alternative would you recommend, and why? What is the total annual shipping cost?" June 22, 2021. https://academic.tips/question/altogether-concerning-the-existing-holding-cost-annual-demand-and-cost-per-box-the-optimal-number-of-boxes-is-80-it-will-meet-the-companys-requirements-and-satisfy-buyers-demands-the-shoe-depart/.

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"Altogether, concerning the existing holding cost, annual demand, and cost per box, the optimal number of boxes is 80. It will meet the companys requirements and satisfy buyers demands. The shoe department buyer at Feets must now choose between shipping vendors from the port of entry (Oakland, CA) to the warehouse in Sacramento, CA. There are two viable alternatives from two different vendors: 2day freight and 5day flat rate freight. The rates for 2day freight are $13.562 per shipping box; and for 5day freight, there is a flat $1,500 per order for any size order up to 123 boxes. The annual percentage holding cost is 35%. Which alternative would you recommend, and why? What is the total annual shipping cost?" Academic.Tips, 22 June 2021, academic.tips/question/altogether-concerning-the-existing-holding-cost-annual-demand-and-cost-per-box-the-optimal-number-of-boxes-is-80-it-will-meet-the-companys-requirements-and-satisfy-buyers-demands-the-shoe-depart/.

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