Problem 4. Burnside Brokerage handles freight shipments for several shipping clients. As a brokerage, Burnside Brokerage acts as a "middle-man" or transportation intermediary by connecting shippers with carriers. Burnside Brokerage contracts with trucking companies to move the freight based on the freight forecasts received from their shipping clients. Based on the rates charged by the carriers, Burnside Brokerage adds a percentage margin to cover their operating costs and to obtain a profit. Three of Burnside Brokerage's key clients have used LTL shipments to enable them to have more frequent deliveries. The delivery quantities (in pounds) is shown below. Client Friday Total Monday Wednesday (all weights are in lbs) 13,000 20,000 27,200 60,200 Meade Mfg Hancock Hardware Grant Granite 15,000 15,000 25,000 55,000 30,000 5,000 30,000 65,000 Burnside Brokerage has requested that the carriers quote their rates in dollars per hundredweight (CWT). The rates quoted by the carriers depend on the lane (origin - destination pair) and the volume shipped. Due to the low volumes per day, less-than- truckload (LTL) carriers must be used. Based on the daily forecasts provided by the clients, the carriers have quoted the following rates: Friday LTL rate Carrier Monday Wednesday LTL rate LTL rate (all rates are in $ICWT) Longstreet Trucking $26 $19 Pickett Logistics $25 $25 $17 $18 Grant Granite $16 $35 $16 Recently, a TL carrier has been seeking to acquire more business on these lanes. You recall from class, that larger LTL shipments may qualify for a truckload (TL) rate. The weekly total in the first column exceeds the minimum required by each of the three carriers to obtain a TL rate. The rates quoted by the TL carrier are shown in the following table: TL lane Meade Mfg Hancock Hardware Grant Granite TL Rate $20 $15 $18 1. What is Burnside Brokerage's cost-to-serve for each of the customers when using the three-day-a-week delivery schedule using the LTL rates? 2. What is Burnside Brokerage's cost-to-serve for each of the customers when using a consolidated (one day-a-week) delivery schedule using the TL rates? 3. What do you recommend for each customer and why? 4. What would you suggest Burnside Brokerage do to convince their customers to adopt any recommendations that may result from your analysis? Remember, the customers wish to have more frequent deliveries and must ultimately pay the freight bill (plus margin)