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ABC Inc. ships its computer products to Buffalo, New York. In 2019, the company shipped 4 million pounds of product through several areas in Buffalo.
ABC Inc. ships its computer products to Buffalo, New York. In 2019, the company shipped 4 million pounds of product through several areas in Buffalo. The logistic Costs in 2019 are given in the table below. Due to growth in emerging markets, the company expects a growth rate of 8% per year through this port for the next five years.
What is the cost to ship 5 million pounds of products for each transportation method (Rail and Truck, respectively)? (Note: Round the variable cost per pound to 3 decimal places)
Rail | Truck | |
Transportation Variable Cost | 300,000 | 245,000 |
Inventory Costs | ||
Carrying | 70,000 | 68,000 |
handling | 35,000 | 43,000 |
Ordering | 25,000 | 27,000 |
Fixed Cost | 267,000 | 180,000 |
Total Cost | 697,000 | 563,000 |
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