McTavish Transportation loads Intermodal containers onto railcars. Each railcar can accommodate a maximum size load of 60 feet long x 8 feet wide x 8 feet high. McTavish only loads three sized of intermodal containers:
Short |
Standard |
Long |
|
Container size (L x W x H) (in feet) |
10 x 8 x 8 |
20 x 8 x 8 |
55 x 8 x 8 |
Price charged to customer: |
$ 520 |
$ 900 |
$ 2,100 |
Variable cost per container |
280 |
300 |
400 |
McTavish currently has space available on 10,000 railcars. No additional railcars are available.
Fixed costs related to loading the railcars is $80,000. This is allocated at $8 per foot of length. (For example, a Short container would be allocated $80 in fixed costs)
Various customers have the following containers to be loaded. Total demand is as follows:
Short: 36,000 containers
Standard: 18,000 containers
Long: 3,000 containers
McTavish can pick and choose which containers are loaded and which customers to accept.
Required
How many rail cars would be required to satisfy all of the current demand?
How many of each container type should McTavish load?
REQUIRED:
a. How many railcars would be required to satisfy all of the current demand:, How many of each container type should Mctavish load:
Answer: Pl refer the calculations given below, we have not satisifed the demand of short by 30000. As we can accomodate 6 Short containers, we need 5000 railcar more to satisfy completely the present demand.
Pl see the calculations given below, we can load Long 3000, Standard 18000 & Short 6000.
NOTE: EACH RAILCAR CAN ACCMODATE A MAXIMUM SIZE OF 60*8*8 | ||||||
ie for short , long & standard it can 60000, 20000,10000 | ||||||
PROFITABILITY ANALYSIS | AMT. $ | |||||
SHORT | STANDARD | LONG | ||||
PRICE CHAGED TO CUSTOMER | 520 | 900 | 2100 | |||
LESS VARIABLE COST | 280 | 300 | 400 | |||
PROFIT | 240 | 600 | 1700 | |||
LESS FIXED EXP SHARE | 80 | 160 | 440 | |||
(PER FT 8) | ||||||
NET PROFIT | 160 | 440 | 1260 | |||
AS PER AREA USED | ||||||
THE PROFIT WILL BE | 6 | 3 | 1 | |||
PROFIT FOR DECISION | 960 | 1320 | 1260 | |||
NOTE: AS WE HAVE HIGHEST PROFIT IN STANDARD CONTAINERS HENCE FIRST | ||||||
CAPACITY WILL BE USED MAXIMUM DEMAND OF 18000 | ||||||
REST CAPACITY ie 10000-6000 (STANDARD) 4000*1 WILL BE USED FOR LONG. | ||||||
demand is of only 3000, hence 3000 will be used. | ||||||
REST CAPACITY WILL BE USED FOR SHORT ie. 1000*6=6000 | ||||||
NOTE: FOR LONG WE HAVE EQUAL CAPACITY ie 10000 | ||||||
FOR STANDARD WE HAVE 3 TIMES OF RAILCAR ie 30000 | ||||||
FOR SHORT WE HAVE 6 TIMES OF RAILCAR ie 60000 | ||||||
NOTE: SIZE OF 55 HAS BEEN TREATED EQUIVALENT TO MAX 60. |
McTavish Transportation loads Intermodal containers onto railcars. Each railcar can accommodate a maximum size load of 60...
UESTION 1 McTavish Transportation loads Intermodal containers onto railcars. Each railcar can accommodate a maximum size load of 60 feet long x 8 feet wide x 8 feet high. McTavish only loads three sized of intermodal containers: Short Standard Long 55 x 8 x 8 Container size (L x W x H) (in feet)10x8x 8 20 x 8 x8 $900 300 $520 280 $2,100 Price charged to customer: Variable cost per container 400 McTavish currently has space available on 10,000...
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