Question
Every week BosssMustang of Oakland, California, receives shipments from 5 different suppliers in the Los Angeles area. Eachsupplier's order weighs, on average, 650 pounds. A
Every week BosssMustang of Oakland, California, receives shipments from 5 different suppliers in the Los Angeles area. Eachsupplier's order weighs, on average, 650 pounds. A direct truck shipment from Los Angeles to Oakland costs $1,200.
A Los Angeles 3PL provider has offered to run a consolidation warehousing operation for BosssMustang. The 3PL provider would pick up the shipments from each supplier, process them, and put them on a single truck bound for Oakland. The pickup fee would be $50 per supplier, and the warehousing cost would be $70 perhundred-weight. The direct truck shipment cost would be the same as before, $1,200.
c. Suppose higher gasoline prices have caused the trucking cost to increase to $1,800.
The total cost of the single-order shipments from all of BosssMustang's suppliers is $_____ per week.
The total cost of the consolidation warehousing option is $_____ per week.
Given these higher gas prices, the _____ option is the best choice. (Consolidated or Single-order)
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