Question
Consider a freight consolidation problem where a supplier located in Kansas City (KC) delivers merchandise to three retailers (customers) located in Chicago, Indianapolis, and Miami.
Consider a freight consolidation problem where a supplier located in Kansas City (KC) delivers merchandise to three retailers (customers) located in Chicago, Indianapolis, and Miami. Each unit of merchandise weighs 8 lbs. The daily shipment volumes (in units of merchandise) for the three customers for three consecutive days are as follows.
Location | Shipment volume per day (units) | ||
Day 1 | Day 2 | Day 3 | |
Chicago, IL | 750 | 2,500 | 3,375 |
Indianapolis, IN | 1,088 | 1,313 | 2,750 |
Miami, FL | 5,750 | 4,438 | 7,125 |
The transportation rates ($/cwt) from KC to customer locations are as follows (1 cwt = 100 lbs):
Location | Transportation rate ($/cwt) | |||
0-99 | 100-199 | 200-399 | 400+ | |
Chicago, IL | 14.76 | 12.07 | 9.88 | 7.73 |
Indianapolis, IN | 20.90 | 16.99 | 12.13 | 10.20 |
Miami, FL | 24.40 | 20.38 | 18.07 | 16.47 |
The supplier currently has dedicated trucks for each of the three customers and delivers daily to each of the three customers.
a) What is the total (i.e., for 3 days) transportation cost for the customer in Indianapolis, IN, under the current system where the supplier delivers daily?
b) What is the total (i.e., for 3 days) transportation cost for the customer in Miami, FL, under the current system where the supplier delivers daily?
c)What is the total (i.e., for 3 days) transportation cost for the current system where the supplier delivers daily?
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