JRC Family Farms, located in California, offers grapes at a purchase price of $0.87 per pound. The grapes are shipped FOB Shipping Point to your facility via motor carrier (TL) at a rate of $120 per load. After arriving at your facility, you've calculated receiving and quality costs at $3.50 per pallet. You estimate that 0.5% of the truckload of grapes will spoil and 0.25% will be wasted in transport. The administrative costs to successfully manage the relationship between JRC Family Farms and your organization are estimated to be approximately 3% of the value of a truckload of shipped grapes. Each case of grapes is 20 pounds, with 40 cases per pallet and 20 pallets per truckload