Range Air Vent Enterprises is trying to determine the best possible mode of transportation and manufacturing options which will save the company time and money. The aim was to determine which mode of transportation, road or rail, would save the company more money while taking into consideration the manufacturing of the range hoods and the satisfaction of the customer. I have determined that it would be more cost effective if RAVE were to purchase the range hoods from Mobile, Alabama and transport them directly to each of the following Canadian distribution centers: Moncton, NB, Brampton, ON, Edmonton, AB and Vancouver, BC. Currently, it is costing RAVE $3,021,408.00CAD to transport the goods from Mobile, Alabama into Brampton, ON and then a further distribution into the other 3 distribution centers. By changing our modal option, RAVE would be spending only $2,888,340.00CAD if we transported the range hoods from Mobile, Alabama directly to the 4 distribution centres. Overall, the total amount of savings would equal to $133,068.00CAD over the course of the year. Not only does shipping the goods directly to the distribution centres save money, but it also cuts down on overall transit times.
Taking into consideration the option of using rail as a mode of transport, I believe it is in the best interest of RAVE to continue servicing freight using road rather than rail. Although the cost of using rail would equal $2,661,360.00CAD a savings of $360,048.00CAD per year, there are a number of disadvantages to the use of the railway system. One of the most important would be transit times. There are a number of different factors which can hinder the time it takes to service the load, one of them being the unexpected closure of the rail due to accidents or weather conditions. These types of incidents are unavoidable and will greatly interfere and affect the time frame in which the load is able to service for the customer.
When taking into...