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Unformatted text preview: managers. Companies who specialize in various aspects of a supply chain are typically better able to handle those activities (e.g., 3PLs). And unless demand was steady over time, instead of say intermittent or seasonal, operating certain portions of a supply chain would be extremely inefficient. Most certainly, this would put a business at a competitive disadvantage. 3. On the plus side, it reduces or removes any environmental issues caused by the outsourced process. However, it is likely that the issues have simply been outsourced as well, and perhaps to a worse degree if there are fewer environmental regulations in the foreign country. Problems 1. H = $10 per item per year (2,000 item) = $20,000 per year. D = 3 days Incremental holding cost = $20,000 (3/365) = $164.38 This exceeds the savings that would result by using 5-day freight. Therefore, use 2-day freight....
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- Fall '11