Single-order shipments to all of its customers each week

Assignment Help Operation Management

Reference no: EM131114608

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: EM131114608

Questions Cloud

Describe the characteristics of an effective leader : Describe the characteristics of an effective leader in each of the following cases and how does communication play a major role in each way a business is run: (a) the business is located in California but the manager of your department lives in New Y..

Design and manufacturing of plastic containers : Delta Plastics, Inc. Specialized in the design and manufacturing of plastic containers, primarily for kitchen and Household use. Their products were sold though merchandise retailers and were recognized for high quality. Delta also had an active R&D ..

Commonly held myths about affirmative action : One of the commonly held myths about affirmative action is

Describe how expert system could be used in another business : Pay particular attention to the portion of the text on expert systems. Could this tool be applied to the job that you do? Describe how an expert system could be integrated into your work environment either with your job or another job. If your work e..

Single-order shipments to all of its customers each week : 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. How much would it cost Astro to m..

Predispose an organization to the swiss cheese theory : Examine James Reasons' Swiss Cheese Theory and its application to quality and risk management, including patient safety, in a health care setting. What organizational influences would predispose an organization to the Swiss Cheese Theory? What strate..

Consequence of being a partner of a partnership : Which of the following is not a consequence of being a partner of a partnership? If a member of an LLC executes a personal guarantee for the debt of an LLC, which of the following is true? The sale of a partner's transferable interest in a business e..

Federal-state or local government to health care cost : One of the major challenges to hit the U.S. health system was the economic depression of 2008. Since that time economic growth has been slow and health care cut have been increased. List and explain two cuts made by employers and federal, state, or l..

What are the characteristics of good screening test : What are the characteristics of a good screening test?

User Account

All Pages