Description
Al Baik must ship replacement parts for their ovens, and the supply chain manager must choose between two shipping alternatives: two-day freight, and five-day freight. Using five-day freight saves 750 Riyal (SAR), but the primary consideration is holding cost, which is 38 Riyal per unit per year. Al Baik must ship 2000 units. In a 3-4-page paper, which alternative would you recommend to the supply chain manager and why?
Be sure to use at least two current, scholarly references beyond any required course readings. Current sources are those published within the most recent five-year period, and scholarly sources are those from peer-reviewed journals.
Make certain for each listed reference that you have at least one supporting citation in the body of your content. Your reference page is always the last page of the submission where all individual references get listed.
APA
Explanation & Answer
Attached.
Running Head: AL BAIK SUPPLY CHAIN ALTERNATIVES
Al Baik Supply Chain Alternatives
Student’s Name
Professor’s Name
Institution of Affiliation
Course
Date
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AL BAIK SUPPLY CHAIN ALTERNATIVES
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The fact that Al Baik is in a position where it is required to ship replacement parts for
their ovens means that more analysis into the matter is important to come up with a perfect
solution. It is recommended that the supply chain manager uses five-day freight option because it
saves 750 Riyal (SAR). The primary consideration of holding cost, which is 38 Riyal per unit per
year is insignificant in this case. on the other hand, the 750 Riyal (SAR) saved is a very
significant amount of money that the company will save, thus reducing the overall cost of the
freight and making it earn higher returns from the replacement parts for their ovens (Axsaeter &
Schneeweiss, 2014). On the other hand, the overall stock holding costs that will be incurred in
case the company relies on five-day freight option alternative is negligible and less than the
amount of money saved in terms of freight costs.
The number of replacement parts for their ovens that Al Baik must ship is 2000 units,
meaning that the holding costs and warehousing costs will be considerably higher than expected.
(Dieter & Be...
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