solution

• CousinsAg, a domestic supplier located in Wahoo, Nebraska
• Dong Hai Supply, an international supplier located in Chengdu, China

Throughout this turnaround, we will ship utilizing Twenty-foot Equivalent Units (TEUs) from each location. Assume the following for all questions:

• Projected Annual Demand is 21,500 units
• There are 365 days in a year
• All product will be shipped to a distribution center in Alliance Fort Worth (AFW) where we will service our customer’s needs
• Inventory carrying cost is 32.2%
• A TEU container can hold up to 600 units of our product.
• The average labor rate in Chengdu is 10.36 Yuan per hour. The average labor rate in Wahoo, Nebraska is $25.30 per hour.
• Today’s exchange rate is 1 CNY China Yuan Renminbi = 0.14646 US Dollar
• The Harris EOQ formula is Q* = SQRT((2*Annual Demand*Ordering Cost)/(Inventory Carrying Cost*Unit Price))
• Our goal is to maintain a 97.7% service level.
• We have a deviation in daily sales of 11 units.
• We cannot buy or hold fractional units of a product

What is the AVERAGE time to ship to ship TEU container from Dong Hai Supply in Chengdu, China to the distribution center in Alliance Fort Worth (AFW) from when the order is placed?

UPDATE: NO ORDERING COST/TIME OF SET UP GIVEN

Group of answer choices

15.00 days

16.30 days

29.50 days

43.00 days

55.94 days