How much would it cost astro to make direct

Assignment Help Operation Management

Reference no: EM13759658

Astro Industries of Minneapolis, MN, makes weekly shipments to 20 customers in the Dallas area. Each customer’s order weighs, on average, 1,500 pounds. A direct truck shipment from Minneapolis to Dallas costs $1,800. The maximum load per truck is 40,000 pounds.

a) How much would it cost Astro to make direct, single-order shipments to all of its customers each week? What would the utilization level for the trucks look like?

b) Suppose a Dallas-based warehousing firm has agreed to run a break-bulk warehousing operation for Astro at a cost of $75 per hundred-weight. Local deliveries to each customer would tack on another $100 per customer per week. How much money could Astro save by going with the break-bulk solution?

c) How high would the warehousing cost (currently at $75 per hundred-weight) have to be before break-bulk warehousing is no more attractive than direct shipments?

Reference no: EM13759658

Questions Cloud

Goals and objectives must be attainable : Suppose you are the owner of a GLOBAL business enterprise, develop: 1. The vision and mission for your company; 2. Create three goals; and 3. For each goal, adopt three objectives. Goals and objectives must be attainable. Objectives must be measurabl..

Corruption and bribery are common in some countries : Corruption and bribery are common in some countries. Would you avoid locating in such a country, or locate there and deal with it? If the latter, how would you deal with it?

Identify the motives behind women dressing for shopping : Dressing for the thrill: An exploration of why women dress up to go shopping. State some of the factors that contribute to pleasurable shopping experience. Identify the motives behind women dressing for shopping.

Process capability ratio of the bottle filling process : A barbecue sauce producer sells their product in a 40 ounce bottle. Their historical process mean has been 40 ounces with a standard deviation of 0.5 ounces. If their tolerance limits are set at 40 ounces plus or minus 2 ounce, what is the process ca..

How much would it cost astro to make direct : Astro Industries of Minneapolis, MN, makes weekly shipments to 20 customers in the Dallas area. Each customer’s order weighs, on average, 1,500 pounds. A direct truck shipment from Minneapolis to Dallas costs $1,800. The maximum load per truck is 40,..

Compute the multifactor productivity measure : Compute the multifactor productivity measure (output in sales dollars) for each week using the data provided below for the production of chocolate bars. Assume 45-hour weeks and an hourly wage of $14. Overhead is 2.5 times the total weekly labor cost..

Two pros and two cons of a business : Two pros and two cons of a business applying different capital budgeting technique when i is faced with making wealth-maximizing decisions around investing corporate funds

While valuation analysis is a quantitative exercise : While valuation analysis is a quantitative exercise, there are a number of judgements that the analyst must make in constructing the valuation.Identify, prioritise, and discuss the most important analytical choices in terms of their impact on the out..

Use information and information technologies : How can a goal-seeking, mission-driven, purposeful organization use information and information technologies to gain a competitive advantage in its attempt to outperform its competitors in achieving its goals?

User Account

All Pages