Business, 01.07.2021 01:00 jacobmacalpine

2. [15 points] Serum Institute of India (SII) is the world’s largest vaccine manufacturer located in Pune, India. SII purchases the empty vials to store the produced vaccines from a supplier located in Chennai, India. SII purchases 50 million vials from the supplier each year at a price of $0.10 per vial. Each vial weighs 0.05 kgs (20 vials would weigh 1 kg). Following table shows the transportation options available. SII carries a safety inventory equal to 40% of the average demand for vials during the replenishment lead time. The holding cost rate is 25% per unit per year. Assume that there are 365 workdays per year. Also, assume that the transit time is lead time less one day. Carrier Quantity shipped (vials) Shipping cost ($/kg) Lead time (days)
Rail 2,000,000 $ 0.08 4
Truck - Tata 500,000 $ 0.15 2
Truck - Leyland 750,000 $ 0.12 2
Truck - Hino 1,000,000 $ 0.10 2

a. What is the total cost (transportation + safety inventory cost + in transit inventory cost + holding cost) for each transportation option?
b. Which transportation carrier would you suggest? Why?

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2. [15 points] Serum Institute of India (SII) is the world’s largest vaccine manufacturer located in...

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