Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please show all formulas and assosiated work. Astro Industries of Minneapolis, MN , makes weekly shipments to 1 6 customers in the Dallas area. Each

Please show all formulas and assosiated work.
Astro Industries of Minneapolis, MN, makes weekly shipments to 16 customers in the Dallas area. Each customers order weighs, on average, 1,250 pounds. A direct truck shipment from Minneapolis to Dallas costs $1,750. The maximum load per truck is 25,000 pounds.
a) How much would it cost Astro to make direct, single-order shipments to all of its customers each week? What would the utilization level for the trucks look like? (5 points)
b) Suppose a Dallas-based warehousing firm has agreed to run a break-bulk warehousing operation for Astro at a cost of $120 per hundred-weight. Local deliveries to each customer would tack on another $100 per customer per week. How much money could Astro save by going with the break-bulk solution? What would the utilization level for truck be in this case? (8 points)
c) How high would the warehousing cost (currently at $120 per hundred-weight) have to be before break-bulk warehousing is no more attractive than direct shipments? (5 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_2

Step: 3

blur-text-image_3

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

Management Of Electronic And Digital Media

Authors: Alan B. Albarran

6th Edition

1305077563, 978-1305077560

More Books

Students also viewed these General Management questions