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Question: Suppose Jones Company has orders from three customers located in the same market area. One order has a total weight of 4,000 pounds, the second weighs 8,000 pounds, and the third weighs 14,000 pounds. The transportation carrier quotes a freight rate of $20.00 per hundredweight (or cwt.) for direct shipment to the customer for shipments weighing 1,000 to 4,999 pounds, $18.00 per cwt. for orders weighing 5,000 to 9,999 pounds, and $16.00 for shipments weighing between 10,000 and 15,000 pounds. Alternatively, the carrier's rate for shipments weighing more than 20,000 pounds is $13.50 per cwt. However, if the orders are combined into one shipment, the carrier will charge $200 for each stop it is required to make. Should Jones consolidate the three shipments?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M92757839

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