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Problem 1 A company needs to fill an online order for 144 hockey sticks, valued at $50 for each stick. The manager is considering shipping the order by truck to the customer, located at 500KM from the company main warehouse. The truck carrier charges $0.15 per KM. The delivery will take 5 days and the order is paid on delivery (the company does not get paid until the sticks are received). Note that the company uses a 25% annual inventory carrying cost. a. What will be the total transportation and in-transit inventory carrying cost of the shipment? b. If the shipment could be delivered in only 2 days at a cost of $150, should the manager do it? How much money would be saved or lost if the manager makes this choice? Problem 2 You are shipping 200 diamonds to a customer located 2000Km away. The total weight of your shipment is 2kg and the average value of one diamond is $2500. You will ship the diamonds via air but you have two options. The first option costs $1300 and the diamonds will arrive in 2 days. The second option uses intermediary stops so it takes more time to arrive (6 days) and it costs $150 per kg. You are using a 15% annual inventory carrying cost. Your customer will immediately transfer funds to your bank account on receipt of the shipment

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