Freight Consolidation

Question 6a:

Rocky Mountain Freight Company has four (4) separate LTL shipments that need to be moved from Salt Lake City, UT. to four different customers in Columbus, OH. Using the information below, determine the cost of both scenarios. Which scenario yields the lowest cost?

Scenario 1: Send four trucks from Salt Lake to Columbus, each with one load, to their respective customers.

Scenario 2: Consolidate shipments at a Salt Lake warehouse, send all four loads on one truck, and drop off the loads at their respective customers in Columbus until all shipments have been delivered.

Weight of each shipment: 8,000 lbs. Cost per truck from Salt Lake City to Columbus: $2,400 Cost to consolidate shipments at the Salt Lake City warehouse: $14.00 per hundred-weight Cost per drop-off load in Columbus (only if one truck is used to drop off all shipments): $600

Question 6b:

Rocky Mountain Freight Company has just found out that one of the customers cancelled their order. Using the same cost information from Question 6a, determine the new cost of both scenarios and again, which of the two scenarios yields the lowest cost.