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LM.91 XYZ Company is rethinking the way it ships to its 74 customers in another city 222 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 $126. 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 alternate shipping method are as follows: • Full TL shipment cost (222 miles) = $740 • Average weight per customer order = 500 lbs. • Warehouse break-bulk fee (per 100 lbs., a.k.a. per "hundred weight") = $13 • Local LTL delivery fee (per customer order) = $38 What is the total cost of delivering to all customers via LTL carrier (current method)? (Display your answer as a whole number.) Number How much money would XYZ company save by using the alternate shipping/delivery method for delivery to all customers? (Display your answer as a whole number.) Number At what number of customers would the cost of these two methods be the same? (Display your answer as a whole number.) Number

LM.91 XYZ Company is rethinking the way it ships to its 74 customers in another city 222 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 $126. 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 alternate shipping method are as follows: • Full TL shipment cost (222 miles) = $740 • Average weight per customer order = 500 lbs. • Warehouse break-bulk fee (per 100 lbs., a.k.a. per "hundred weight") = $13 • Local LTL delivery fee (per customer order) = $38 What is the total cost of delivering to all customers via LTL carrier (current method)? (Display your answer as a whole number.) Number How much money would XYZ company save by using the alternate shipping/delivery method for delivery to all customers? (Display your answer as a whole number.) Number At what number of customers would the cost of these two methods be the same? (Display your answer as a whole number.) Number

Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
ChapterC: Cases
Section: Chapter Questions
Problem 3.8A
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LM.91 XYZ Company is rethinking the way it ships to its 74 customers in another city 222 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 $126. 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 alternate shipping method are as follows: • Full TL shipment cost (222 miles) = $740 Average weight per customer order = 500 Ibs. • Warehouse break-bulk fee (per 100 lbs., a.k.a. per "hundred weight") = $13 • Local LTL delivery fee (per customer order) = $38 What is the total cost of delivering to all customers via LTL carrier (current method)? (Display your answer as a whole number.) Number How much money would XYZ company save by using the alternate shipping/delivery method for delivery to all customers? (Display your answer as a whole number.) Number At what number of customers would the cost of these two methods be the same? (Display your answer as a whole number.) Number
Transcribed Image Text:LM.91 XYZ Company is rethinking the way it ships to its 74 customers in another city 222 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 $126. 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 alternate shipping method are as follows: • Full TL shipment cost (222 miles) = $740 Average weight per customer order = 500 Ibs. • Warehouse break-bulk fee (per 100 lbs., a.k.a. per "hundred weight") = $13 • Local LTL delivery fee (per customer order) = $38 What is the total cost of delivering to all customers via LTL carrier (current method)? (Display your answer as a whole number.) Number How much money would XYZ company save by using the alternate shipping/delivery method for delivery to all customers? (Display your answer as a whole number.) Number At what number of customers would the cost of these two methods be the same? (Display your answer as a whole number.) Number
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