LM.91 XYZ Company is rethinking the way it ships to its 52 customers in another city 176 miles away. Current Shipping/Delivery Method They currently hire an LTL (less-than-truckload) carrier to pick up and deliver these shipments. Each customer order shipped via LTL carrier costs $140. Alternate Shipping/Delivery Method A 3PL (third-party logistics provider) has approached XYZ Company and suggested that they make full truckload (TL) shipments from their facility to the 3PL's warehouse in the customers' city. The 3PL would then break the bulk shipment (TL or truckload shipment) into individual customer orders to be shipped locally by an LTL carrier. The relevant data for this alternate shipping method are as follows: Full TL shipment cost (176 miles) = $775 Average weight per customer order = 680 lbs. Warehouse break-bulk fee (per 100 lbs., a.k.a. per "hundred weight") = $13 Local LTL delivery fee (per customer order) = $29 What is the total cost of delivering to all customers via LTL carrier (current method)? (Display your answer as a whole number.) How much money would XYZ company save by using the alternate shipping/delivery method for delivery to all customers? (Display your answer as a whole number.) At what number of customers would the cost of these two methods be the same? (Display your answer as a whole number.) PLEASE SHOW IN EXCEL
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Total cost = Number of customers * Cost per customer order Total cost = 52 customers * $140 Total cost = $7280 Show more…
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Astro Industries of Minneapolis, Minnesota, makes weekly shipments to 40 customers in the Dallas area. Each customer's order weighs, on average, 1500 pounds. A direct truck shipment from Minneapolis to Dallas costs $2000. The maximum load per truck is 45,000 pounds. a. The total cost for Astro to make direct, single-order shipments to all of its customers is $ per week. (Enter your response as a whole number.) The average truck utilization level for the single-order shipment option is %. (Enter your response rounded to one decimal place.) b. Suppose a Dallas-based warehousing firm has agreed to run a break-bulk warehousing operation for Astro at a cost of $100 per hundredweight. Local deliveries to each customer would tack on another $50 per customer per week. The total cost of the break-bulk warehousing option is $ per week. (Enter your response as a whole number.) c. Assume that the total cost of the break-bulk warehousing option and the total cost of the single-order option are equal. Solve this equation for the warehousing cost to find how high the warehousing cost (currently $70 per hundredweight) would have to be before break-bulk warehousing is no more attractive than direct shipments. Find the new warehousing cost.
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