Question

The Superior Manufacturing Company of America wants to make two shipments from Raleigh, NC, to New York, NY. The first shipment weights 12,000 pounds and the second shipment weight 17,000 pounds. The carrier charges $10 per hundredweight (cwt) if the goods are shipped separately and the shipments arrive in two days. If the goods can be consolidated into one shipment, the cost would be $8 per cwt to ship them in one truckload but would cost $500 to consolidate the shipments at the carrier’s warehouse and it would take three days. Inquiries 1. Showing all work, calculate the total cost of both shipment options. 2. Which is the lowest cost? 3. Does the group believe sustainability should be a consideration? 4. In addition to cost, what other factors – not including sustainability, either – should be considered? Present and elaborate on at least two considerations. 5. Which approach would you select? Explain your rationale (the rationale of the team).

Answer 1

Option 1 is Costlier than Option 2 to the extent of $80. But considering the increase in shipping days by one day by saving 80 is not beneficial advised because the company can reduce 1 shipping day for the customer. This surely reflects the nature of the company which the name suggests. The superior manufacturing company.