You manage over-the-road transportation for COMPANY A and must put together a savings estimate for the calendar year 2022 based on three cost savings opportunities. Base information: The over-the-road transportation spend is estimated today to be 100 million per year. The volume split between less-than-truckload (LTL) and truckload (TL) is fifty-fifty. The LTL transport mode is typically 18% more expensive than the TL transport mode. Initiative A: Can be implemented on 1 st April 2022 and will result in a 10% reduction in the cost of the LTL transport mode. Initiative B: Can be implemented on 1 st July 2022 and will convert 20% of the volume currently being transported via LTL into TL deliveries. Initiative C: Can be implemented on 1 st October 2022 and will result in a 12% reduction in the cost of TL deliveries but would also cause a 4% increase in the cost of LTL deliveries.

1. How is the 100 million spend spil between Logle \&ocs? 1 mark ANSWER: 2. If COMPANY A implements all three initiatives in 2022, what is the total projected savings and how much is attributed to each initiative? (Note - You may assume that once an initiative in implemented, the savings stays the same even after another initiative is implemented) 3 marks ANSWER: 3. COMPANY A has a cost of implementation for each initiative of 500,000. Which initiative(s) do you recommend that they implement in 2022 and why? (Hint - Think about calculating the savings estimate of all combinations to see what is the total for each combination: e.g. A\&B\&C Total, A\&B Total etc.) 1 mark ANSWER: 4. If COMPANY A only has 1,000,000 to spend in 2022 on these initiatives, would your answer to question 3 be different? If so, why? (Hint - Think about using the combinations from question 3) 1 mark ANSWER: 1. How is the 100 million spend spil between Logle \&ocs? 1 mark ANSWER: 2. If COMPANY A implements all three initiatives in 2022, what is the total projected savings and how much is attributed to each initiative? (Note - You may assume that once an initiative in implemented, the savings stays the same even after another initiative is implemented) 3 marks ANSWER: 3. COMPANY A has a cost of implementation for each initiative of 500,000. Which initiative(s) do you recommend that they implement in 2022 and why? (Hint - Think about calculating the savings estimate of all combinations to see what is the total for each combination: e.g. A\&B\&C Total, A\&B Total etc.) 1 mark ANSWER: 4. If COMPANY A only has 1,000,000 to spend in 2022 on these initiatives, would your answer to question 3 be different? If so, why? (Hint - Think about using the combinations from question 3) 1 mark