Bruin Logistics handles hundreds of shipments from businesses in the Los Angeles

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 Click the icon to view the shipments table The cost to Bruin of sending a truck from Los Angeles to Atlanta is $1,500. The maximum load per truck is 19,000 pounds. If Bruin were to use a direct truck shipment for each customer, the shipping costs would be $1,500 per customer, or $4.500 total. The weight utilization across all three trucks would be 8,000 pounds/57,000 pounds, or just 14%-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 S7 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 $100 for each customer. Under these conditions, the costs of consolidating the three shipments to Atlanta would be Click the icon to view the consolidated delivery costs 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 $14 per hundred-weight. All other values stay the same as provided in the problem statement. The cost of the consolidation option is S(Enter your response as a whole number.) b. Delivery costs to each customer fall to $50. All other values stay the same as provided in the problem statement. The cost of the consolidation option is S(Enter your response as a whole number) c. Cost of sending a truck from Los Angeles to Atlanta falls to $1,400, but delivery costs rise to $250 per customer. All other values stay the same as provided in the problem statement -X More Info Shipment 110 boxes, drawing paper 90 PC printers 12 dining room sets Weight 4,000 lbs 2,500 lbs 1,500 lbs 8,000 lbs Consolidated delivery costs Customer Warehousing costs Cost of one truck to Atlanta Delivery to final customer $7(8,000 lb/100 lb.)-$560 $1,500 3 customers × $100 = $300 S2,360 Venetian Artists Supply Kaniko Ardent Furniture Total Total

Explanation / Answer

The cost of consolidation is sum of three costs 1) Warehousing cost 2) Cost of one truck to Atlanta and 3) Delivery cost to final customer

a) The warehousing cost = 14*(8000/100) = 1120

The cost of the consolidation option is = 1120 + 1500 + 300 = $ 2920

b) Total deliver cost to final customer = 50*3 = 150

The cost of the consolidation option is = 560 + 1500 + 150 = $ 2210

c) Total deliver cost to final customer = 250*3 = 750

Csot of one truck to Atlanta = 1400

The cost of the consolidation option is = 560 + 1400 + 750 = $ 2710

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