Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Currently, your company ships cases of product directly from your factory in Chicago to individual customers in the Los Angeles area. Each individual shipment averages

image text in transcribed
Currently, your company ships cases of product directly from your factory in Chicago to individual customers in the Los Angeles area. Each individual shipment averages 2300 pounds at an LTL freight rate of S46.55 per hundredweight. Your firm currently moves approximately 32,000 shipments to Los Angeles each year You have been approached by a manager who wants to consider a zone skipping strategy to move the shipments. They have determined that the company can consolidate the products and ship them using a truckload carrier to a warehouse near Los Angeles. The TL rate would be $15.85 per hundredweight. At the Los Angeles warehouse, the shipments would be broken down and shipped to their final destination by a local LTL carrier. The LTL rate would be $18.95 per hundredweight Calculate the cost of each strategy. What would be the maximum yearly price that you could pay for the Los Angeles warehouse to make the zone skipping idea a successful plan? (1 points) To help explain the impact the warehouse has on the system costs, also provide a short answer to the following questions. Be clear on the answers and don't just copy material from the book. 2] Why do inventory costs increase as the number of warehouses in a system increase? (3 3 Why do transportation costs initially decrease as the number of warehouses in a system 4] Why do transportation costs eventually increase as the number of warehouses increase? (3 points) increase? (3 points) points)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Investments

Authors: Bradford Jordan, Thomas Miller

4th Edition

0073314978, 9780073314976

More Books

Students also viewed these Finance questions

Question

What is the content-level meaning?

Answered: 1 week ago