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Unformatted text preview: 1.03*$0.002/lb= $0.00206/lb (total cost plus 3% loss) 1.17*$0.00206/lb= $0.00241/lb (Total cost plus overhead cost) 5. Total Cost for entire process=$0.40/lb+$$0.0157/lb+$0.00241/lb= $0.42/lb. Addition Cost: $25,000/incident for undetected spoilage 2% volume loss from production 6. In order to keep the entire process in a standard form and within budget. It keeps the cost at a certain level and can open the possibilities of reducing cost. 7. Alternatives would include using cheaper packaging, being able to detect spoilage before it happens. Also being able to move shipments from warehouse into production quickly to save money on inventory carrying cost and thereby reducing the in and out fee from the warehouse. Larger container should be purchased to reduce the number of trips across the ocean....
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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.
- Fall '08