ASIA PRP SOURCING

Base Cost (Asia) $0.40

Duty (only for products sourced from USA or Asia) 18%
Labelling cost/ unit (Asia) $0.02
Volume (cubic ft) 0.016
Ocean Fright ($ per cubic ft) $2.05
Weight (lbs) 0.1
Manzanillo to Mexico City shipping rate ($ per lb) $0.12
Product Cost per unit (Asia) (C) $0.54

Mean lead time (days) - Asia 65

Mean lead time (weeks) - Asia (L) 9.2857143

Std deviation of lead time (days) - Asia 7

Std deviation of lead time (weeks) - Asia (sigma L) 2.6457513

Order Cost per SKU (Asia) (S) 12.6

Time of peridoic review (weeks) (T) 4

N= No of orders per year 13.035714

Mean Monthly demand of SKU 1800

Annual mean demand of SKU (D) 21600
Weekly mean monthly demand of SKU (d) 450

Standard deviation of demand (Monthly) 250

Standard deviation of demand (weekly) (sigma d) 120.76147

Customer Service Level 0.98

Zcsl 2.0537489
L (Zcsl) 0.007

Sigma (Demand during lead time) 1269.3502

Safety Stock (SS) 2606.9266

h 0.25
ESC 8.8854516
E(N) 115.82821
Sales price 1.33
Profit Margin $0.79

Costs
Purchase Cost $11,594.88
Order Cost $164.25
Expected Shortage (Opportunity) Cost $91.87
Inventory Holding Cost $461.03
Total Cost / year $12,312.04
 USA PRP SOURCING
Base Cost (USA) $0.41
Duty (only for products sourced from USA or Asia) 18%
Labelling cost/ unit (US) $0.14
Weight (lbs) 0.1
US Shipping rate per lb (OKC to Border) $0.05
Mexico Shipping rate per lb (Border to Mexico City) $0.12

Product Cost per unit (USA) $0.64

Mean lead time (days) - USA 14

Mean lead time (weeks) - USA (L) 2

Std Deviation of lead time (days) - USA 1.3

Std Deviation of lead time (days) - USA (sigma L) 0.491353815

Order Cost per SKU (USA) (S) 4.86

Time of peridoic review (weeks) (T) 2

N= No of orders per year 26.07142857

Mean Monthly demand of SKU 1800

Annual mean demand of SKU (D) 21600
Weekly mean monthly demand of SKU (d) 450

Standard deviation of demand (Monthly) 250

Standard deviation of demand (weekly) (sigma d) 120.7614729

Customer Service Level 0.98

Zcsl 2.053748911
L (Zcsl) 0.007

Sigma (Demand during lead time) 327.448651

Safety Stock (SS) 672.4973103

h 0.25
ESC 2.292140557
E(N) 59.75937881
Sales price 1.33
Profit Margin $0.69

Costs
Purchase Cost $13,841.28
Order Cost $126.71
Expected Shortage (Opportunity) Cost $41.19
Inventory Holding Cost $174.10
Total Cost / year $14,183.27
 LOCAL CRP SOURCING
Base Cost (Local) $0.80

Product Cost per unit (Local) $0.80

Mean lead time (days) - Local 3

Mean lead time (weeks) - Local (L) 0.428571429

Optimal Order Size (Q) 245.9268184

Order Cost per SKU (Local) (S) 0.28

Mean Monthly demand of SKU 1800

Annual mean demand of SKU (D) 21600
Weekly mean monthly demand of SKU (d) 450

Standard deviation of demand (Monthly) 250

Standard deviation of demand (weekly) (sigma d) 120.7614729

Customer Service Level 0.98

Zcsl 2.053748911
L (Zcsl) 0.007

Sigma (Demand during lead time) 79.0569415

Safety Stock (SS) 162.3631075

h 0.25
ESC 0.553398591
E(N) 48.60555524
Sales price 1.33
Profit Margin $0.53

Costs
Purchase Cost $17,280.00
Order Cost $24.59
Expected Shortage (Opportunity) Cost $25.76
Inventory Holding Cost $57.07
Total Cost / year $17,387.42