Homework #1 Bus Adm 476 Lec 203 Logistics and Transportation Management

Homework #1 Bus Adm 476 Lec 203 Logistics and Transportation Management Problem 1. (Chapter 1: Business Logistics/Supply Chain-A Vital Subject) Suppose that a manufacturer of men’s shirts can produce a dress shirt in its Huston, Texas plant for $8 per shirt (including the cost of raw materials). Chicago is a major market for 100,000 shirts per year. Transportation and storage charges from Huston to Chicago amount to $5 per hundredweight (cwt.) Each packaged shirt weighs 1 pound. As an alternative, the company can have the shirts produced in Taiwan for $4 per shirt (including the cost of raw materials).The raw materials, weighing about 1 pound per shirt, would be shipped from Huston to Taiwan at a cost of $2 per cwt. When the shirts are completed, they are to be shipped directly to Chicago at a transportation and storage cost of $6 per cwt. An import duty of $0.5 per shirt is assessed. a. From a logistics-production cost standpoint, should the shirts be produced in Taiwan? b. Please name at least three additional considerations, other than economic ones, might be considered before making a final decision. Problem 2. (Chapter 2: Logistics/Supply Chain Strategy and Planning) Describe the principle of differentiated distribution. Explain how it is illustrated in the following situations: a. Total distribution costs are minimized if back orders on field warehouse inventories are filled from plant inventories. Premium transportation is used to ship back orders directly from plant to customers. b. The product items stocked in a wareho