Stanley Harris, traffic manager of This n’ That Manufacturers, is considering th

Question

Stanley Harris, traffic manager of This n’ That Manufacturers, is considering the negotiations of a freight-all-kind (FAK) rate for shipment between Atlanta and Lansing. The company ships 200 (class 65) shipments of 5,000 lb., 40 (class 400) shipments of 1,200 lb., and 30 (class 100) shipments of 10,000 lb., and receives a 45% discount on published rates. a) Refer to Table 8.8 to determine the current freight bill for the above shipments. Note: Take the discount from the published rate and round up for the applicable hundredweight rate. b) Should Mr. Harris accept a FAK rate of $10 per hundredweight? c) What factors aside from price should Mr. Harris consider with a FAK rate?

Origin 303: Destination 489: MC 81.00: RBNO 00775E M10M Rate Class 5C 233.58 188.24 144.11 126.30 M5C 193.89 156.25 M5M M30M 147.14 118.58 90.78 79.56 119.10 95.98 73.48 64.40 50.16 45.20 38.81 33.03 28.69 84.05 67.73 40.32 32.55 24.94 32.25 28.24 52.69 40.34 35.34 27.53 24.81 19.95 17.48 13.60 12.24 10.56 17.45 04.84 88.65 76.11 64.76 45.45 35.40 31.90 17.00 15.30 13.20 11.25 15.31 10.72 7.88 3.58 63.18 53.76 46.71 43.68 41.33 38.31 35.62 33.59 31.92 0.58 28.90 27.22 55.84 47.94 40.80 35.43 33.15 31.37 29.07 27.03 25.50 24.22 23.21 21.93 20.66 1000- 23.31 20.25 18.94 17.92 16.61 15.44 14.57 13.84 13.26 12.53 11.80 15.75 14.73 13.94 12.92 12.01 11.33 10.76 10.31 6.92 52.62 49.79 46.15 42.91 40.48 38.46 36.84 34.81 32.79 9.22 7.38 25.39 23.53 21.88 20.64 19.61 18.78 6.86 6.67 6.01 70 6.35 6.22 40,000 16.71 10,000 20,000-30,000 Over 20,000 Limits (Ib) 1000 0,000 30,000 40,000 ABLE 8.8 Example of Rates from Atlanta, Georgia (zip 303), to Lansing, Michigan (zip 489)

Explanation / Answer

B.

So as the rate is $ 0.325, he should not accept a rate of $10 per hundredweight.

C.

The other factors are:

Qty Class Wt Total weight Rate class Rate Total 200 65 5000 1000000 M5M 13.84 2768 40 400 1200 48000 M1M 118.58 4743.2 30 100 10000 300000 M10M 14.73 441.9 1348000 7953.1 Discount 45% Final Amount 4374.205 Bill Ans A Avg 100th wt rate 0.324496 $ Ans A

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