Logistics

Logistics; Case 8-1; Aero Marine Logistics

Overview of numbers in the case;

1. Income

There is a monthly income of (150 000 x 0.20 =) 30 000 US by the full sale of 150 000kg of food.

2. Fixed costs

1 Lakh = 2 222US,

There will be needed to buy equipment to provide the containers with power. These cost 9 Lakh in total. This is (9 x 2 222 =) 19 998US.

Also in the periods of extreme conditions there will be more energy costs. AML expects them to be 3 Lakh annual. This is (3 x 2 222=) 6 666US.

3. Optional costs

Optionally AML and Freshfood inc. can chose between a situation of shipping in 20-foot containers or 40-foot containers.

Buying ten 20-feet containers will cost 8 Lakh per container. Thus getting 10 of them will cost 80 Lakh. In dollars this will be (80 x 2 222 =) 177 760US. These have a 5 year lifespan and have a repair check every year.

On the other hand there is the option to buy five 40-foot containers. These containers cost 15 Lakh per unit. This is (15 x 2 222 x 5=) 166 650US in total. The containers have a 10 year lifespan and are repaired free of charge for the first year only.

4. Shipping costs

Shipping will be done in two phases according the case. The first phase is shipping by boat, departing from Amsterdam and arriving in Bombay.

The second phase is the transport over land. This shipment is from Bombay and goes to Delhi.

Also here there is a difference in shipping prices when looking at 20-foot containers and 40-foot containers.

Shipping costs from Amsterdam to Bombay costs 1700US per container for 20-foot containers and 2600US for 40-foot containers per unit per month.

* Ten 20-foot containers; 10 x 1700 = 17 000US (204 000US annual)

* Five 40-foot containers; 5 x 2600 = 13 000US (156 000US annual)

Transportation by land have a different cost. The cost for 20-foot containers is 300US and for 40-foot containers 500US per unit per month.

* Ten 20-foot containers; 10 x 300 = 3 000US (36 000 annual)

* Five...