PLease answer in 30 minutes and round correctly! Thank you 1. XYZ Company is ret

Question

PLease answer in 30 minutes and round correctly! Thank you

1. XYZ Company is rethinking the way it ships to its 72 customers in another city 220 miles away.

Current Shipping/Delivery Method

They currently hire an LTL (less-than-truckload) carrier to pick up and deliver these shipments. Each customer order shipped via LTL carrier costs $148.

Alternate Shipping/Delivery Method

A 3PL (third-party logistics provider) has approached XYZ Company and suggested that they make full truckload (TL) shipments from their facility to the 3PL's warehouse in the customers' city. The 3PL would then break the bulk shipment (TL or truckload shipment) into individual customer orders to be shipped locally by an LTL carrier. The relative data for this alternative shipping method are as follows:

Full TL shipment cost (220 miles) = $675

Average order weight = 750 lbs.

Warehouse break-bulk fee (per 100 lbs., a.k.a. per "hundred weight") = $12

Local LTL delivery fee = $38

a.What is the total cost of delivering to all customers via LTL carrier (current method)? (Display your answer as a whole number.)

b.How much money would XYZ company save by using the alternate shipping/delivery method? (Display your answer as a whole number.)

c.At what number of customers would the cost of these two methods be the same? (Display your answer to two decimal places.)

Explanation / Answer

a. For each of the 72 customer orders, it cost XYZ 148$.

Therefore the total cost is 148*72 = 10,656$

b. Total cost by alternate method = Full TL shipment cost + Warehouse break-bulk fee + Local LTL delivery fee

Full TL shipment cost = 675$

Warehouse break-bulk fee -

Total weight = 750lbs * 72 orders = 54000 lbs

Cost = 54000 * (12/100) = 6,480$

Local LTL delivery fee = 38*72 = 2,736$

Total cost = 675 + 6480 + 2736 = 9891$

Savings = 10,656 - 9891 = 765$

c. Let the number of customers be x

In Current method Cost = 148*x

In new method cost = 675 + (7.5*12*x) + 38*x

For equal cost -

148x = 675 + (7.5*12*x) + 38*x

148x = 675 + 90x + 38x

148x - 90x - 38x = 675

20x = 675

x = 675/20

x = 33.75

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