Your procurement department just bought 13,000 cases of abrasive discs from South Korea and you need to work out getting them to your DC.

• The terms of the procurement state that cases will be floor loaded into containers and you will pay the transport costs from that point.
• If you wish to change this to a palletized load you will need to pay the cost of palletizing the load.
• The cost of draying (trucking) a container (size does not matter) to the seaport in South Korea is $250 per container.
• The containers will be shipped to the Port of Los Angeles and then moved by truck or intermodal rail to your DC located in Phoenix Arizona (420 miles)
• When the shipment arrives at the DC the cases need to have been or must be loaded onto 48" x 40" pallets with a total height not to exceed 54" with a total weight not to exceed 750 lbs.
• The cases themselves are 8" x 10" by 10" in height and weigh 5 lbs. each
• The 48" X 40" pallets weigh 22 lbs. each and are 6" in height
• The total charge for shipping a 40' high cube container from South Korea to LA is $4500
• The interior dimensions of the 40" high cube container are:
  • Length 39' 5 3/8", Width 7' 11 3/4", Height 8' 10"
  • Weight capacity is 63,000 LBS
• The total charge for shipping a 20' container from South Korea to LA is $3500
• The interior dimensions of the 20' container are:
  • Length 19' 4 1/8", Width 7' 10 1/4", Height 7' 10 1/4"
  • Weight capacity is 63,000 LBS
• The interior dimensions of a 53' semi-truck trailer are:
  • Length 52' 6", Width 8' 3", Height 9' 2 1/4"
• Cost of trucking to Phoenix (all inclusive) $2.84 / mile per truck
• Time needed to palletize the 13,000 cases is 25 person-hours
• Labor cost per person hour in South Korea $15, in Los Angeles $22, Phoenix $17
• If you palletize the load in Los Angeles, you can shift the load into a 53' semi-truck trailer
• Total gross cargo weight per trailer or container cannot exceed 45,000 lbs. while being moved by truck in the U.S. (note: there are exceptions to this general statement, however we will not address them in this assignment)
• If you wish to use inter-modal rail from LA to Phoenix you can assume the cost will be 30% less than the cost of trucking, but it will take twice as long.

In this assignment you are to:

1. Calculate the total, most economical, costs of the shipments for the following three scenarios:

• The load is palletized in South Korea
• The load is palletized in Los Angeles
• The load is palletized in Phoenix

2. Show all your calculations including:

• Number of cases and total weight of the floor loaded containers
• Number of cases loaded onto each pallet, total pallet weight, and the number of pallets per container if the shipments are palletized
• The gross weights (including pallets, if applicable) loaded into each container and or truck trailer used in the shipments.