Transportation configuration

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Reference no: EM132299560

Transportation Configuration Question

Basket Makers international is the premier provider of home basket ball hoops and backboards.

Its factory is located in Farwest Missouri. Most orders come from individuals and small mom and pop shops. They currently ship 11,000 hoops and backboards a year.

Today every hoop set goes separately. They ship the wheel sets LTL on Fedex and each shipment costs $100.00.

Because of competition from Amazon they are compelled to offer free shipping. Currently there is no middle man. The average hoop set sells for $750.00 and costs $450.00 to produce.

As the new manager of supply chain at baskets international you have been asked to attack the shipping costs, which are eating into their margins. You work with a 3PL to set up another option.

The 3PL will take full truck loads to their warehouses of 100 sets at a time, and ship them locally for $50.00. The full truck loads cost $5,000 each.

Altenatively, you have priced around and you can get Old Dominion to replace Fedex for $95.00 a hoop set.

1. How much will the Old Dominion option save you per year? Please show answer in excel

2. Which option should you take and why? Please show answer in excel

Reference no: EM132299560

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