ANNUAL TRANSPORTATION and IN-TRANSIT INV COSTS

ANNUAL TRANSPORTATION and IN-TRANSIT INV COSTS -...

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ANNUAL TRANSPORTATION AND IN-TRANSIT INVENTORY  COSTS
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Calculating Annual  Transportation Cost Volume transportation rates: reduced rate  applies to the entire shipment Annual transportation cost = (freight rate  per unit) x (annual demand in units) F = freight rate per unit FD = annual transportation cost
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Many carriers (notably LTL motor carriers and  railroads) quote transportation rates in $ per  hundred pounds, or $ per cwt Convert units to cwts or freight rate per cwt to freight  rate per unit; we will convert the freight rate Divide the freight rate per cwt by the number of units in  a cwt; number of units in a cwt is 100/unit weight in  pounds Example:  freight rate per cwt = $30; weight per unit = 15  pounds; freight rate per unit = $30/(100/15) = $4.50 per cwt
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Calculating the Annual In-transit  Inventory Cost Annual in-transit inventory cost
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This note was uploaded on 03/05/2010 for the course LSCM 360 taught by Professor Martins during the Fall '08 term at Iowa State.

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ANNUAL TRANSPORTATION and IN-TRANSIT INV COSTS -...

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