tion to Oper ALEKS Other The following information will be used for this questio
ID: 378603 • Letter: T
Question
tion to Oper ALEKS Other The following information will be used for this question AND the two that follow A company needs to move 500,000 lbs of product over a distance of 1,000 miles. Because of the location of the destination warehouse, the company is considering two options for transportation. Option 1 is to move the product using only trucks over the entire 1.000 miles. Option 2 is to move the product by train over a distance of 950 miles and then the remaining 50 miles by truck. Below are the details of how the trucking and train carriers charge. Truck: $200/truck; miles) 20,000 lb capacity/ truck; $0.50/lb (for distance over 200 $0.10/lb (for distance under 200 miles) Train: $25,000/train: 250,000 lb capacity/trai What is the cost for the company to transport the 500,000lbs by option 1? (there is no inventory cost in this problem). n: $0.20/lb for any distance) $255,000 $250,000 $500,000 10:19 AMExplanation / Answer
(13)
Option 1
No. of trucks = 500,000 / 20,000 = 25 i.e. 25 x $200 = $5,000
For the 1000 miles, cost = $0.50 x 20,000 x 25 = $250,000
Total Cost = $250,000 + $5,000 = $255,000
(14)
Option 2
No. of trains = 500,000 / 250,000 = 2 i.e. 2 x $25,000 = $50,000
No. of trucks = 500,000 / 20,000 = 25 i.e. 25 x $200 = $5,000
For the 50 miles, truck transportation costs = $0.10 x 500,000 = $50,000
For the 950 miles, train transportation costs = $0.20 x 500,000 = $100,000
Total Cost = $50,000 + $5,000 + $50,000 + $100,000 = $205,000
(15)
Option 2: Save $5,000
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