How might packing improvements affect transportation costs

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Reference no: EM132300408

CHronotronics produces (2) models of clock radios, the X-100 & the X-250 deluxe. Both products are currently packaged in i single-wall corrugation. Through observation, the firm has discovered that 0.5% of both the X-100 & the X-250s are damaged between packaging and customer delivery. Chronotronics can package either model, or both, in double-wall corrugated fiberboard, which would reduce product damage by half. The current single-wall packaging costs $0.80 per unit Double-wall packaging costs 20% more. The X-100 and the X-250 have market values of $40 & $70, respectively. Damaged units are a total loss. Chronotronics sold 12,000 X-100 & 7,000 X-250s last year. Forecasts indicate consistent sales for the X-100 and and a 5% increase in X-250 sales over the next year.

1) From a least-cost perceptive, should Chronotronics utilize double-wall corrugation with the X-100 next year?

2) should Chronotronics utilize double-wall corrugation with X-250 net year?

3) How might packing improvements affect transportation costs?

Reference no: EM132300408

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