Bruin Logistics handles hundreds of shipments from businesses in the Los Angeles
ID: 334821 • Letter: B
Question
Bruin Logistics handles hundreds of shipments from businesses in the Los Angeles area. At? present, Bruin has three shipments to deliver to the Atlanta area.
LOADING...
the shipments table.?
Customer
Shipment
Weight
Venetian Artists Supply
100
3,000
Kaniko
100
3,000
Ardent Furniture
10
4,000
?Total:
10,000
The cost to Bruin of sending a truck from Los Angeles to Atlanta is ?$2,000. The maximum load per truck is 20,000 pounds. If Bruin were to use a direct truck shipment for each? customer, the shipping costs would be $2,000 per? customer, or ?$6,000 total. The weight utilization across all three trucks would be 10,000 pounds/60,000 pounds, or just 17?% long dash—hardly an economic or environmentally wise use of resources.
But suppose Bruin has a consolidation warehouse where loads from multiple customers can be combined. Of? course, there are costs associated with consolidation. Assume that the cost of running the warehouse is approximately $99 per?hundred-weight. Furthermore, if Bruin decides to consolidate the three? shipments, it must consider the additional cost of breaking them up for local? delivery, which is not an issue in direct trucking. Suppose the cost of breaking up the shipments is $200 for each customer. Under these? conditions, the costs of consolidating the three shipments to Atlanta would? be:
LOADING...
the consolidated delivery costs
??????????????????????????
Consolidated delivery costs
Warehousing costs
?$9 (10,000 ?lb./100 ?lb.)equals=?$900
Cost of one truck to Atlanta
?$2,000
Delivery to final customer
?Total:
?$3,500
Given all of this? information, recalculate the cost of the consolidation option if all costs remain the same? except:
a. The cost of running the warehouse doubles to $18 per? hundred-weight. All other values stay the same as provided in the problem statement.
The cost of the consolidation option is now.....?(Enter your response as a whole? number.)
b. Delivery costs to each customer fall to $150. All other values stay the same as provided in the problem statement.
The cost of the consolidation option is now .....(Enter your response as a whole? number.)
c. Cost of sending a truck from Los Angeles to Atlanta falls to ?$1,800?, but delivery costs rise to $250 per customer. All other values stay the same as provided in the problem statement.
The cost of the consolidation option is now.......Enter your response as a whole? number.)
Customer
Shipment
Weight
Venetian Artists Supply
100
boxes of drawing paper3,000
lbs.Kaniko
100
PC printers3,000
lbs.Ardent Furniture
10
dining room sets4,000
lbs.?Total:
10,000
lbs.Explanation / Answer
a. The cost of running the warehouse doubles to $18 per? hundred-weight. All other values stay the same as provided in the problem statement.
The cost of the consolidation option is now.....4400
( As the Warehousing cost doubles, the cost of warehousing for 10,000 Lbs would become 1800, instead of 900 in the base scenario.). Hence the 3500 would increase by 900, to become $4400
b. Delivery costs to each customer fall to $150. All other values stay the same as provided in the problem statement.
The cost of the consolidation option is now .....$3350
(With all other parameters remaining same, the cost of final delivery to each customer becomes 150*3= 450 instead of 600 in base scenario. Hence the total cost of consolidation option drops by $150 to $3350
C. Cost of sending a truck from Los Angeles to Atlanta falls to ?$1,800?, but delivery costs rise to $250 per customer. All other values stay the same as provided in the problem statement.
The cost of the consolidation option is now.......$3450
(The cost of truck would drop by $ 200 but the cost of final delivery to customer would increase by $ 150. Hence the cost of consolidation option drops by $50 to $3450
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