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Review for Exam 1

Review for Exam 1

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Review for Exam 1

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  1. Review for Exam 1 • Case 6-1 pages 205-210 • Send 17,000 lbs of arch supports from St. Jo to Green Bay. • By rail: • UFC Item 13390 Boot or shoe arch supports • LCL rating 100 • CL rating 70 (over 20,000 lbs) • Freight Tariff Rate Bases:St. Jo to Green Bay • 579 Class Rates • at LCL 349 cents per cwt

  2. Case 6-1 Cont’d • at LCL 349 cents per cwt • 349 cents/cwt = $3.49/cwt • 17,000 lbs = 170 cwt • $3.49*170 = $593.30 • Should we ship “wind”? • at CL 244 cents per cwt • 244 cents/cwt = $2.44/cwt • 20,000 lbs = 200 cwt • $2.44*200 = $488

  3. Case 6-1 Cont’d • Interest Rate 15%/year • $21,000 value • LCL takes 10 days • CL takes 6 days • 4 days interest on $21,000 • 15%/365*21000 = $8.63 daily interest • 4 days interest is $34.52

  4. Use Truck? • $0.85/mile • 588 miles • 2 days • Cost to Green Bay = $499.80 • Saves additional 4 days interest or $34.52 • So the relative cost is $465.28 which is less than CL • But…?

  5. From St. Louis • Freight Tariff Rate Bases:St. Louis to Green Bay • 458 Class Rates • at LCL 307 cents per cwt • 307 cents/cwt = $3.07/cwt • 17,000 lbs = 170 cwt • $3.07*170 = $521.90

  6. Case 6-1 Cont’d • Should we ship “wind”? • at CL 215 cents per cwt • 215 cents/cwt = $2.15/cwt • 20,000 lbs = 200 cwt • $2.15*200 = $430