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Weyerhaeuser Inc., a kraft paper manufacturer located in Longview, WA was considering options to reduce the total delivery cost to its customers in Miami, Florida vicinity. Currently, Weyerhaeuser is only selling full truck load quantity to its customer in Miami, Florida vicinity. The total trucking distance is 3,300 miles and the transit time is 5 days per truck load. The supply chain director at Weyerhaeuser was thinking to setup a warehouse in Chicago, using railroad to transport brown paper from Longview to a Chicago warehouse, when customers in Miami place a truck load order, Weyerhaeuser can use Schneider to truck order from Chicago to Miami, and was wondering if this solution will produce a lower total delivery cost. - Historical Data points: currently shipping 7 truckloads per week from Longview to Miami and the Maximum is 350 truckloads per year for 50 working weeks. Schneider trucking has agreed to a line haul rate for Weyerhaeuser at $2.68/ mile. Use the PADD (i.e. US On Highway Diesel Fuel Prices) chart and the Fuel Surcharge Chart (which begins at $3.25 ) to determine the fuel surcharge per mile. - Distance between Longview and Miami is 3,300 miles and transit time is 5 days. - Distance between Chicago and Miami is 1,400 miles and transit time is 2 days. The base trucking rate is $4.00 /mile. Use the PADD (i.e. US On Highway Diesel Fuel Prices) chart and the Fuel Surcharge Chart (which begins at $3.25 ) to determine the fuel surcharge per mile. - BNSF Rail freight is $6,800 per box car from Longview to Chicago. Each box car has the equivalent capacity of 3.5 trucks. Rail transit time is 5 days. The Fuel Surcharge from BNSF rail is $1.50 per mile; The rail mileage from Longview to - The Chicago warehouse total operations cost (not including inventory carrying cost) is $45,000/ month U.S. On-Highway Diesel Fuel Prices"(dollars per galion) Answer the following questions: A. What is the total annual delivery cost for using truck mode to ship directly from Longview, WA to Miami, Florida? (10 pts) B. What is the total annual delivery cost for using the combined Rail, Warehousing and trucking as a shipping solution? (10 pts) c. What is your recommendation? (5 pts) this table Weyerhaeuser Inc., a kraft paper manufacturer located in Longview, WA was considering options to reduce the total delivery cost to its customers in Miami, Florida vicinity. Currently, Weyerhaeuser is only selling full truck load quantity to its customer in Miami, Florida vicinity. The total trucking distance is 3,300 miles and the transit time is 5 days per truck load. The supply chain director at Weyerhaeuser was thinking to setup a warehouse in Chicago, using railroad to transport brown paper from Longview to a Chicago warehouse, when customers in Miami place a truck load order, Weyerhaeuser can use Schneider to truck order from Chicago to Miami, and was wondering if this solution will produce a lower total delivery cost. - Historical Data points: currently shipping 7 truckloads per week from Longview to Miami and the Maximum is 350 truckloads per year for 50 working weeks. Schneider trucking has agreed to a line haul rate for Weyerhaeuser at $2.68/ mile. Use the PADD (i.e. US On Highway Diesel Fuel Prices) chart and the Fuel Surcharge Chart (which begins at $3.25 ) to determine the fuel surcharge per mile. - Distance between Longview and Miami is 3,300 miles and transit time is 5 days. - Distance between Chicago and Miami is 1,400 miles and transit time is 2 days. The base trucking rate is $4.00 /mile. Use the PADD (i.e. US On Highway Diesel Fuel Prices) chart and the Fuel Surcharge Chart (which begins at $3.25 ) to determine the fuel surcharge per mile. - BNSF Rail freight is $6,800 per box car from Longview to Chicago. Each box car has the equivalent capacity of 3.5 trucks. Rail transit time is 5 days. The Fuel Surcharge from BNSF rail is $1.50 per mile; The rail mileage from Longview to - The Chicago warehouse total operations cost (not including inventory carrying cost) is $45,000/ month U.S. On-Highway Diesel Fuel Prices"(dollars per galion) Answer the following questions: A. What is the total annual delivery cost for using truck mode to ship directly from Longview, WA to Miami, Florida? (10 pts) B. What is the total annual delivery cost for using the combined Rail, Warehousing and trucking as a shipping solution? (10 pts) c. What is your recommendation? (5 pts) this table
