Question 10 1 pts Every week, ACME Industries of Pittsburgh receives shipments f
ID: 378420 • Letter: Q
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Question 10 1 pts Every week, ACME Industries of Pittsburgh receives shipments from 14 different suppliers in the Philadelphia area. Each individual order weighs, on average, 650 pounds. Each individual direct truck shipment from Philadelphia to Pittsburgh costs $275 per trip. (ACME pays each supplier for product plus shipping costs) A south Philadelphia logistics provider makes an offer to run a local consolidated warehousing operation for ACME Industries. The logistics provider will pick up the individual shipments from each Philadelphia location, temporarily store the items, do the appropriate paperwork and load everything on a single truck bound for Pittsburgh. The pick-up fee would be $55 per local supplier, and the warehousing cost would be $25 per every 100 pounds shipped. The consolidated direct truck shipment to Pittsburgh will cost $400 Notice which option provides the less costly distribution channel for ACME. If ACME runs individual trucks from each Philadelphia location t Pittsburgh, how much does it ACME per week to accept these individual direct, single-order shipments? I Choose ] s6,500 $3,445 $6,850 $3660 $6,650 $3,850 $9,100 How much would it cost to use th consolidated warehouse option fo a week?Explanation / Answer
Total number of shipments from different suppliers = 14
Total cost of shipment from 14 locations = $275 / location x 14 locations = $ 3850
When shipments from 14 locations get consolidated in warehousing operation and consolidated despatch is effected :
Total pick up fee = $ 55 / local supplier x 14 local suppliers = $770
Consolidated direct truck shipment to Pittsburgh = $400
Total weight of shipments = 650 pounds/ supplier x 14 supplier = 9100 Pounds
Warehousing cost ( $25 per every 100 Pound ) = 25/100 x 9100 Pounds = $2275
Thus , total cost of consolidation and shipment
= Total pick up fee + Consolidated direct truck shipment to Pittsburg from Warehouse + Warehousing cost
= $ 770 + $ 400 + $2275
= $3445
Thus ,
Savings per set of trip every week through use of consolidated service = $3850 - $3445 = $405
Hence annual savings = $405 / week x 52 weeks = $21060
SAVINGS PER YEAR TO USE THE CONSOLIDATED SERVICE = $21060
SAVINGS PER YEAR TO USE THE CONSOLIDATED SERVICE = $21060
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