Jucio, an orange juice manufacturer in Liverpool, UK, imports fresh oranges from Spain. Jucio imports 6,000 pounds of fresh orange every week and its freight classification is 85. The company realized that it could reduce the weight of its shipment to 2,500 pounds and bring down its freight classification to 50 by outsourcing the activity of extracting juice to a local company in Spain and transporting the juice to Liverpool. Use Table 15.2 to calculate the break-even cost of using this service.

Data from Table 15.2:

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TABLE 15.2 EXAMPLE MATRIX OF WEIGHT BREAKS AND FREIGHT CLASS ($/CWT) Class <500 (lb) 500 (lb) 1,000 (lb) 50 28.32 24.25 55 30.50 26.12 32.69 27.99 34.64 29.66 36.86 31.56 39.72 34.01 42.86 36.70 46.15 39.52 49.77 42.61 60 65 70 77.5 85 92.5 100 34.30 36.94 39.59 41.94 44.64 48.10 51.90 55.89 60.27 2,000 (lb) 5,000 (lb) 10,000 (lb) ≥ 20,000 (lb) 23.04 17.58 15.74 10.47 24.82 18.93 17.41 11.58 26.60 20.29 19.08 12.69 28.18 21.49 20.27 13.48 22.88 21.94 14.59 24.65 23.85 15.86 26.60 26.24 17.45 28.64 28.38 18.87 30.89 30.77 20.46 29.99 32.32 34.87 37.56 40.50