Case 5-1 Let There Be Light ( Final Exam Submission)

Case 5-1 Let There Be Light Lamp Shade Company Submitted By: Hend Mohamed Saiid Abdul Moneim

Submitted to: Dr. Islam El- Nakib 7/24/2011

Case 5-1 Let There Be Light

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Case Study Analysis

Company facts:

• Located Madison, Wisconsin

Product Facts:

• 5,400 identical Lamp Shade (to Asia)

Design Options:

• Style A: cylinder, 11” x 11”

• Style B & C: Cone-shaped

Terms of Sale:

Delivery to the foreign port where the buyer would take possession

Transportation to port of Oakland:

• Land rate: $1,000 per 40-ft container (8’w, 8.5’h, 40’ l)

• Max weight: 44,000 lbs.

Transportation from Port of Oakland to overseas port:

• Ocean rate: $22 per ton (2,000 lbs.)

• Measurement ton: 40 ft3 = 1 ton

• Insurance Cost: 2% of the value of shipment


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Packaging Information:

Style A Style B Style C

Manuf. Cost (Per Piece)

4.00$ 5.00$ 6.00$

Packaging Cost (Each) 0.60$ 2.00$ 3.00$ Package Size 12 by 12 by 12 Inches 12 by 12 by 48 Inches 12 by 12by 50 Inches Number of Pieces Per Pack

1 6 10

Package Weight ( Pounds)

10 62 101

Some Important Rules:

1 Foot = 12 Inches

1 ton = 2000 lbs. (Pounds)

Cubic Feet = Length X Width X Height


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Case Answers

Q1: How many styles A shades can be loaded into an intermodal container?

Since;

the intermodal container Size = 8 feet wide by 8.5 feet high by 40 feet Long

Then let’s turn these measurement into Cubic feet ; if we calculated them as they are 8 * 8.5 * 40 we

will get 2720 cubic feet but we will ignore the 0.5 ( 6 inches area ) of the 8.5 height as they are not

used since the normal package is of size 12 by 12 by 12 inches.

So; the intermodal container Size in Cubic feet = 2560 1

Then we have to calculate the total size of one package of shades from style A; this will require the

conversion of the given measurements into feet & then to Cubic feet to unify the units.

So; 12 by 12 by 12 inches in feet = 12/12 by 12/12 by 12/12 feet = 1 by 1 by 1 feet

Then convert these measurements into Cubic feet.

So the package size of style A in cubic feet= 1 * 1 * 1 = 1 (referring to some important rules). 2

From Findings 1 & 2

We will divide the Size of the intermodal container by the size of the style A Package in order to get the

number of packages form style A that the container can hold

2560/ 1 = 2560 packages

The Package or the box contains one shade so 2560 * 1 = 2560 shades that an intermodal container

can hold from shades of style A.

So ; since one intermodal container can hold from Style A 2560 shades; and we want to deliver 5400

identical lamp to Asia so we will be needing 5400/2560 = 2.10 ( ~ approx.) = 3 containers

PS. Quoting from the case “the load could not exceed 44,000 pounds per loaded container because of

highway weight restrictions” so for verifications:

The weight of each shade = 9 pounds SO; 9 * 2560 shades = 23040 pounds; which means that the load

per one container in pounds is equal to 23040 pounds (so we are in the safe side by 20960 pounds per

loaded container)


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Q2: How many styles B shades can be loaded into an intermodal container?

As previously mentioned;

Since;


And we already mentioned that we are going to ignore the top 6 inches (0.5) because they are unused;


Then we have to calculate the total size of one package of shades from style B; this will require the


So the package size of style B in cubic feet= 1 * 1 * 4 = 4 (referring to some important rules). 2

Then we will divide the size of container by the size of the package to know how many packages the

container could hold we will get:

2560/4 = 640 packages 3

Then in order to get the number of shades that an intermodal container can hold ; we will multiply the

number of packages (640) by the number of shades that one pack can hold which are 6 shades to get

the total number of shades that an intermodal container can hold from style B.

640 Packages * 6 shades/package = 3840 Shades (an intermodal container can hold from Style B)

So ; since one intermodal container can hold from Style B 3840 shades; and we want to deliver 5400

identical lamp to Asia so we will be needing 5400/3840 = 1.4 ( ~ approx.) = 2 containers



The container can hold 640 packages of style B so 640 (packages that an intermodal can hold of style

B) * 62 pounds (the total weight of one package) = 39680 pounds which means that the load per one

container in pounds is equal to 39680 pounds; (so we are in the safe side by 4320 pounds per loaded

container)


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Q3: How many styles C shades can be loaded into an intermodal container?

As previously mentioned;

Since;


And we already mentioned that we are going to ignore the top 6 inches (0.5) because they are unused;


Then we have to calculate the total size of one package of shades from style A; this will require the


So the package size of style C in cubic feet= 1 * 1 * 4.1 (Approx. to 4) = 4 (referring to some important

rules). 2

Then we will divide the size of container by the size of the package to know how many packages the

container could hold we will get:

2560/4 = 640 packages 3

Then in order to get the number of shades that an intermodal container can hold ; we will multiply the

number of packages (640) by the number of shades that one pack can hold which are 10 shades to get

the total number of shades that an intermodal container can hold from style C.

640 Packages * 10 shades/package = 6400 Shades (an intermodal container can hold from Style C)

So ; since one intermodal container can hold from Style C 6400 shades; and we want to deliver 5400

identical lamp to Asia so we will be needing only 5400 out of 6400 so technically ; since one container

can hold 6400 shades; so also one container will hold our desired 5400 identical shades.


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Since the total weight of one package of style C = 101 pounds and the one package holds 10 shades so;

the weight of one shade = 101/10 = 10.1 pounds

So since we want to transfer only 5400 shades; so 5400 shades * 10.1 pounds = 54540 pounds Per

container; which means that we have here Excess (overweight) by 10540 pounds per load; therefore

we will need 2 containers and each one will approximately withstands about (54540/2 = 27270

pounds).


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Q4: What are the total costs of delivering the style A shades to the port of

importation?

Item Cost parameters Total cost

Shade $4 ( cost per Shade) x

5,400 ( needed to be

transfer)

$21,600

Packaging $.60 x 5,400 $3,240

Intermodal containers (3)

The land rate to Oakland $1,000 x 3 (needed

containers) $3,000

Insurance ( from the value

of the shipment)

$27,800 (Costs up to this

point) x .02

$556

Ocean freight rates

Since the ocean

congruence used a

measurement ton that

indicated that for bulky

loads very 40 cubic feet

would equal 1 ton for rate

making purposes ; I used

the method of 40 cubic

feet as the indicator not

the 2000 pounds.

$22 per 40 cubic feet Since the 40 Cubic

feet container = 1 ton

and the box of style

A = 1 Cubic feet.

So; the 1 cubic feet

box = 0.025 tone.

Since; we have 5400

package of style A to

be shipped so; 0.025

* 5400 = 135 tones

So the ocean freight

rate will be: 135

tones * 22 $ = 2970 $

Total $31,366


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Q5: What are the total costs of delivering the style B shades to the port of

importation?


Shade $5 x 5,400 $27,000

Packaging $2 x 900 $1,800


The land rate to Oakland $1,000 x 2 $2,000


of the shipment)

$30,800 x .02 $616

Ocean freight rates

Since the ocean

congruence used a





making purposes; I used



the 2000 pounds.




B= 4 Cubic feet.


box = 0.1tone.

Since; we have 900

package of style B (

5400/6 to be shipped

so; 0.1 * 900 = 90

tones


rate will be: 90 tones

* 22 $ = 1980

Total 33396 $


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Q6: What are the total costs of delivering the style C shades to the port of

importation?


Shade $6 x 5,400 $32,400

Packaging $3 x 540 $1,620


The land rate to Oakland $1,000 x 2 $2,000


of the shipment)

$36020 x .02 $720.4 ~ 720 $

Ocean freight rates

Since the ocean

congruence used a





making purposes; I used



the 2000 pounds.




C= 12/12 by 12/12 by

50/12 = 1 by 1 by

4.167 feet and

4.16667 cubic feet


box = 0.104tone.

Since; we have 540

package of style C (

5400/10 to be

shipped so; 0.104 *

540 = 56.25 tones


rate will be: 54 tones

* 22 $ = 1235.5 ~

1236

Total 37977.5 ~37978$


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Q7: Which style would you recommend? Why?

If we compared between the total cost of each style in order to get delivered to the port of

importation we will find that style A is the least expensive.

Style A Style B Style C

Manuf. Cost (Per Piece)

4.00$ 5.00$ 6.00$

Packaging Cost (Each) 0.60$ 2.00$ 3.00$ Package Size 12 by 12 by 12 Inches 12 by 12 by 48 Inches 12 by 12by 50 Inches Number of Pieces Per Pack

1 6 10

Package Weight ( Pounds)

10 62 101

Also; from the above data as we can see while production; the manufacturing cost per shade

of style A is the least expensive too as it costs 4 $ while the style B & C costs 5 $ and 6 $

respectively.

Even the packaging cost is cost effective in style A while B & C score more.

Basically; the above table shows; more relevant information that support the decision of

recommending style A such as package weight and package size.

Besides; Style A is the only style that scored the highest number of shades that an intermodal

container can hold even without exceeding the weight limits 44000 Lbs.


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Documents

Case 5-1 Let There Be Light ( Final Exam Submission)