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The Scenario

You are a retailer of appliances (Best Buy, Sears, Sam’s, etc). You are buying a container of appliances from China. 100 appliances fit in the container. Each appliance costs $320. It costs $220 to ship the container to the port. It takes 2-days to get the product to the port. You have the option of shipping the product from Singapore to Seattle and then to Chicago or shipping the product from Singapore to LA and then to Chicago. Assume that you paid for the freight at the port of origin location. The details for each scenario are outlined below:

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Scenario 1: Singapore to Seattle to Chicago

The cost to ship a full container is $1,800 from Singapore to Seattle. The port entry fee to handle the container is $110. The distance from Seattle to Chicago is 2,072 miles. Your trucking company charges you $1.02 per mile to move the freight. The product takes 15-days to get to Seattle from Singapore. It takes an additional 6 days to go from Seattle to your facility in Chicago. Once the product arrives in Chicago it is stored in the RDC and shipped to regional stores over a 15 day period. The carrying cost of inventory is 22-percent. Calculate the total landed cost. (show your work)

Scenario 2: Singapore to LA to Chicago

The cost to ship a full container is $1,850 from Singapore to LA. The port entry fee to handle the container is $153. The distance from LA to Chicago is 2,034 miles. Your trucking company charges you $1.00 per mile to move the freight. The product takes 16days to get to LA from Singapore. It takes an additional 6 days to go from LA to your facility in Chicago. Once the product arrives in Chicago it is stored in the RDC and shipped to regional stores over a 16 day period. The carrying cost of inventory is 22percent. Calculate the total landed cost. (show your work)

 
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