The table below provides shipping rates for packages using UPS next day air or g
ID: 371291 • Letter: T
Question
The table below provides shipping rates for packages using UPS next day air or ground service options. The rates vary according to both the weight of the package and the distance of the shipment (larger numbered zones are farther away). Note that the zone number also indicates the number of days required to deliver a package using ground service. For example, it would take three days and cost $7.40 to send a 10-pound package to zone 3 using ground service.
Suppose you have a package weighing 12 pounds that needs to be shipped to zone 4. The value of the material is $10,000 and the annual inventory holding rate is 40 percent of the product value.
a-1. Calculate the total shipping and transit inventory cost using the air and ground transportations. (Use 365 days in a year. Do not round intermediate calculations. Round your answers to 2 decimal places.)
a-2. Which transportation mode (air or ground) minimizes the total shipping and transit inventory cost? (Round your answer to 2 decimal places.)
b. How high would the inventory holding rate have to be in order to justify next day air service? (Use 365 days in a year. Do not round intermediate calculations. Round up your answer to the next whole number.)
Table of Shipping Rates Next Day Service Weight Domestic Zones 1 2 3 4 5 6 7 1 Lbs. $ 16.25 $ 19.25 $ 22.75 $ 24.75 $ 27.00 $ 28.25 $ 29.00 2 $ 17.25 $ 20.75 $ 25.50 $ 27.75 $ 30.25 $ 31.25 $ 32.00 3 $ 19.00 $ 21.75 $ 28.25 $ 30.50 $ 33.50 $ 34.75 $ 35.50 4 $ 20.00 $ 22.75 $ 31.00 $ 33.50 $ 36.50 $ 37.75 $ 38.50 5 $ 21.25 $ 24.25 $ 33.50 $ 36.25 $ 39.50 $ 40.75 $ 41.75 6 $ 22.00 $ 25.25 $ 36.00 $ 39.00 $ 42.75 $ 44.00 $ 45.00 7 $ 22.75 $ 27.00 $ 38.50 $ 42.00 $ 46.00 $ 47.00 $ 48.25 8 $ 23.75 $ 28.25 $ 41.00 $ 44.75 $ 49.25 $ 50.25 $ 51.25 9 $ 24.50 $ 29.75 $ 43.75 $ 47.50 $ 52.50 $ 53.75 $ 54.50 10 $ 25.25 $ 31.00 $ 46.25 $ 50.25 $ 55.25 $ 56.75 $ 57.75 11 $ 26.25 $ 32.50 $ 48.75 $ 52.75 $ 58.00 $ 60.00 $ 60.75 12 $ 27.00 $ 33.50 $ 51.25 $ 55.50 $ 60.75 $ 63.00 $ 63.75 13 $ 27.75 $ 34.75 $ 53.75 $ 58.00 $ 63.25 $ 65.75 $ 66.50 14 $ 28.50 $ 36.00 $ 55.75 $ 60.50 $ 65.75 $ 68.50 $ 69.25 15 $ 29.50 $ 37.50 $ 58.00 $ 63.00 $ 68.25 $ 70.75 $ 72.00 Ground Service Weight Domestic Zones - Transit Time in Days 1 2 3 4 5 6 7 1 Lbs. $ 4.75 $ 4.90 $ 5.25 $ 5.35 $ 5.65 $ 5.70 $ 5.85 2 $ 4.85 $ 5.15 $ 5.65 $ 5.80 $ 6.25 $ 6.40 $ 6.80 3 $ 5.00 $ 5.40 $ 6.00 $ 6.25 $ 6.70 $ 6.90 $ 7.55 4 $ 5.15 $ 5.60 $ 6.30 $ 6.60 $ 7.10 $ 7.30 $ 8.05 5 $ 5.40 $ 5.80 $ 6.60 $ 6.95 $ 7.40 $ 7.75 $ 8.55 6 $ 5.55 $ 6.00 $ 6.75 $ 7.20 $ 7.65 $ 8.05 $ 8.85 7 $ 5.75 $ 6.15 $ 6.90 $ 7.45 $ 7.95 $ 8.35 $ 9.25 8 $ 6.00 $ 6.35 $ 7.10 $ 7.60 $ 8.25 $ 8.75 $ 9.90 9 $ 6.20 $ 6.55 $ 7.25 $ 7.80 $ 8.45 $ 9.25 $ 10.55 10 $ 6.40 $ 6.70 $ 7.40 $ 8.00 $ 8.80 $ 9.90 $ 11.25 11 $ 6.60 $ 6.90 $ 7.55 $ 8.25 $ 9.20 $ 10.60 $ 12.05 12 $ 6.80 $ 7.10 $ 7.70 $ 8.45 $ 9.60 $ 11.35 $ 12.95 13 $ 7.00 $ 7.35 $ 7.85 $ 8.65 $ 10.05 $ 12.05 $ 13.80 14 $ 7.15 $ 7.55 $ 8.00 $ 8.85 $ 10.60 $ 12.75 $ 14.65 15 $ 7.35 $ 7.80 $ 8.15 $ 9.05 $ 11.15 $ 13.45 $ 15.55Suppose you have a package weighing 12 pounds that needs to be shipped to zone 4. The value of the material is $10,000 and the annual inventory holding rate is 40 percent of the product value.
a-1. Calculate the total shipping and transit inventory cost using the air and ground transportations. (Use 365 days in a year. Do not round intermediate calculations. Round your answers to 2 decimal places.)
Transit inventory cost for air transportation Total cost using air transportation Transit inventory cost for ground transportation Total cost using ground transportationa-2. Which transportation mode (air or ground) minimizes the total shipping and transit inventory cost? (Round your answer to 2 decimal places.)
transportation minimizes the total shipping and transit inventory cost byb. How high would the inventory holding rate have to be in order to justify next day air service? (Use 365 days in a year. Do not round intermediate calculations. Round up your answer to the next whole number.)
Inventory holding rate %Explanation / Answer
Hi,
Thanks for the question.
4 P's define the marketing strategy for any company or for a particular brand. This is the strategy to reach and market the product to the customers.
The 4 P's will be:
Product: As mentioned, the product for this particular scenario will be McChicken and Big Mac.
Price: Price generally should be according to the perception of the customers to see its worth. They should consider to price the product moderately not on a low price because that would give the feel as the quality compromised.
Place: That should be very evenly distributed across the outlets in the US. The product will be very popular so the company should be very efficient in the distribution.
Promotions: Mcdonald's is very aggressive in terms of the advertising mostly in the Tv advertisement or OOH branding.
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