Input Data
Placement cost per order 100.00$
TL cost per Truck 400.00$
LTL cost per unit 1.00$
Unit cost 50.00$
Holding cost 20%
Truck Capacity 1000
Intermediate Calculations
Fixed cost per order using TL (S)
500.00$
Fixed cost per order using LTL (S)
100.00$
Holding cost per unit (H) 10.00$
Annual trucking cost = 3,056$
Annual holding cost = 1,236$
Total annual cost = 5,528$
TL Costs – LTL Costs = (0.14)$
Our goal in this problem is to obtain an annual demand for which TL costs are equal to LTL
costs. As the annual demand increases, the optimal batch size grows making TL more
economical. Above the threshold obtained, Flanger should use TL. Below the threshold
they should use LTL. The decision variable is in cell B17 and we aim to get the value in Cell
B33 to 0.