Oil-Co, a refiner in Indiana, serves four customers near Nashville, Tennessee, and maintains consignment inventory (owne

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Oil Co A Refiner In Indiana Serves Four Customers Near Nashville Tennessee And Maintains Consignment Inventory Owne 1 (53.7 KiB) Viewed 32 times

Oil-Co, a refiner in Indiana, serves four customers near Nashville, Tennessee, and maintains consignment inventory (owned by Oil-Co) at each location. Currently, Oil-Co uses TL (truckload) transportation to deliver separately to each customer. Each truck costs $2000 fixed cost plus $400 per stop (a fixed drop-off cost). Thus, delivering to each customer separately costs $2400 per truck trip. Annual demand at the first, the second, the third and the fourth customer is 100, 60, 40, 30 tons, respectively. Product cost for Oil-Co is $3,000 per ton and they use a holding cost of 20%. Truck capacity is 12 tons. Oil-Co is aggregating deliveries to Nashville on a single truck. What is the optimal delivery policy to each customer when Oil-Co aggregates shipments to each of the four customers on every truck that goes to Nashville? Report the total annual transportation and inventory holding costs overall for the four customers one by one and for the whole system at the aggregated level. You can/should use the course template and adapt it to solve the final exam question suitably. You need to operate the Excel Solver for the end-results and obtain the optimum course of action. Excel Solver entries will be diligently checked for the produced results.