Transportation Managing the Flow of the Supply Chain Supply Chain Management A Logistics Perspective 8eCASE 10-1Supreme Sound ExplosionSupreme Sound Explosion (SSE). located in Memphis. Tennessee, produces concertquality sound systems for rock. rap. and country musicians. Recently. the companypartnered with two new suppliers to create an innovative line of speakers called Blasters.Blasters provide 100 decibels more sound versus competitors’ speakers. Interest inthe product is great as potential buyers want to reduce the number of sound systemcomponents that need to be taken on tour. This is no small matter when you considerthat groups like the Rolling Stones and U2 regularly use dozens of tractor trailers tomove equipment during their stadium tours. Tour costs can be reduced if equipment isstreamlined and fewer trucks are needed to haul the equipment between tour stops.Also. more tour stops can be scheduled as loading/unloading/setup/tear down time isreduced.One of the key suppliers makes woofers in Athens. Georgia. while the other makestweeters in Portland. Oregon. Two tweeters are inserted into each woofer to make aBlaster. SSE assembles Blasters and uses existing suppliers for other required components.While SSE has negotiated per-unit purchasing costs with two suppliers. decisionsregarding delivery of the components remain. Each supplier has proposed twodifferent delivery options. The proposals are now in the hands of SSE’s operationsmanager who has limited experience with transportation issues. Demand for Blasters isexpected to be 400 units per month. and production is scheduled to begin in less thana month.Product and delivery characteristics arc shown in the following table:W1- delivery via LTL once per week with FOB origin, Freight Collect terms. The freight cost per delivery is $832 with an expected transit time of two days. Delivery options: W2- delivery via TL every other week with FOB destination, Freight Collect terms. The freight cost per delivery is $932 with an expected transit time of one day.TWEETERSManufactured in Portland, ORSSE purchase price $2,380 per pairWeight 6 poundsDimensions 12”(L) X 8”(W) X 6” (H)Characteristics Compact. Vibration and moisture sensitive, supplier builds to orderDelivery options:T1- delivery via LTL once per week with FOB destination, Freight Collect and Allowed. The freight cost per delivery is $689 with an expected transit time of five days.T2 – delivery via airfreight two times per week with FOB origin, Freight Collect terms. The freight cost per delivery is $669 with an expected transit time of two days.1. What is the delivery cost per unit of woofers and tweeters for each option?
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