1. The table below provides shipping rates for packages using next day (1-day) air or 5-day ground service options. The rates vary according to the weight of the package. Suppose you have a package weighing 15 pounds that needs to be shipped. The value of the material is $10,000 and the annual inventory holding rate is 40 percent of the product value. What is the carrier cost if you use the ground carrier? Check Example 11-1, 11-2 or the second example from the solved problems.
Weight 5-Day Ground
1-5 lbs. $7.10
6-10 lbs. $8.45
11-15 lbs. $11.15
16-20 lbs. $13.45
2. Discuss the impact of Inbound Transportation Management on controlling inventory carrying costs.