Case 3 - David Lum SCM 406W 3/1/08 Wire Harness Case...

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David Lum SCM 406W 3/1/08 Wire Harness Case Demand: 5,000 units/month=60,000 units/year Weight: 1 unit=10 pounds Weight per year=60,000 units/year*10 pounds/unit=600,000 pounds/year 1. Original Wire $30/unit $0.75/unit for packing $6,000 for tooling $5.20/100 pounds then 600,000 pounds/year*($5.20/100 pounds)= $31,200/year Total Yearly Cost = $30.75/unit + $31,200 + $6,000 =$30.75/unit*(60,000 units/year) +$37,200 =$1,882,200/year Total Unit Cost= $1,882,200 per year/60,000 units per year =$31.37/unit 2. Happy Lucky Assemblies : 1 monthly shipment=3 containers $19.50/unit $3,000 for tooling $2/unit for packing $200/container= $600/shipment for inland transportation $100/shipment for freight forwarders fee $4,000/container= $12,000/shipment for ocean transport
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$1,200/container= $3,600/shipment for US port handling charges $300/shipment for customs broker fees $400/shipment for hedging currency $100/shipment for additional administrative fees $18.60 per 100 pounds*(600,000 pounds/year)= $111,600/year for transportation from LA to Detroit $1 per 1 cubic foot a month=$12 per 1 cubic foot an year for warehousing costs
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This note was uploaded on 05/23/2008 for the course SCM 406W taught by Professor Dawnrussell during the Fall '08 term at Pennsylvania State University, University Park.

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Case 3 - David Lum SCM 406W 3/1/08 Wire Harness Case...

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