Transportation Configuration Question | ||||||||||||||||||
Basket Makers international is the premier provider of home basket ball hoops and backboards. | ||||||||||||||||||
Its factory is located in Farwest Missouri. Most orders come from individuals and small mom and pop shops. They currently ship 11,000 hoops and backboards a year. | ||||||||||||||||||
Today every hoop set goes separately. They ship the wheel sets LTL on Fedex and each shipment costs $100.00. | ||||||||||||||||||
Because of competition from Amazon they are compelled to offer free shipping. Currently there is no middle man. The average hoop set sells for $750.00 and costs $450.00 to produce. | ||||||||||||||||||
As the new manager of supply chain at baskets international you have been asked to attack the shipping costs, which are eating into their margins. You work with a 3PL to set up another option. | ||||||||||||||||||
The 3PL will take full truck loads to their warehouses of 100 sets at a time, and ship them locally for $50.00. The full truck loads cost $5,000 each. | ||||||||||||||||||
Altenatively, you have priced around and you can get Old Dominion to replace Fedex for $95.00 a hoop set. | ||||||||||||||||||
Please show answer in Excel | ||||||||||||||||||
Q1 | ||||||||||||||||||
How much is Basket Makers International currently making per year? | ||||||||||||||||||
ANSWER : | ||||||||||||||||||
Please show answer in Excel | ||||||||||||||||||
Q2 | ||||||||||||||||||
How much will the 3PL option save you per year? | ||||||||||||||||||
ANSWER : |
Q.1
NO OF HOOPS AND BACKBOARDS A YEAR | 11000 |
TOTAL SELLING PRICE | 8250000 |
TOTAL COST PRICE | 4950000 |
TOTAL SHIPPING COST | 1100000 |
TOTAL PROFIT FOR YEAR | 2200000 |
Q.2
ANSWER
THE PROFIT WILL REMAIN THE SAME
3PL OPTION | |
TOTAL COST PRICE | 4950000 |
TOTAL SHIPPING COST | 550000 |
LOADING CHARGES | 550000 |
TOTAL SELLING PRICE | 8250000 |
TOTAL PROFIT FOR YEAR | 2200000 |
Transportation Configuration Question Basket Makers international is the premier provider of home basket ball hoops and...
Transportation Configuration Question Basket Makers international is the premier provider of home basket ball hoops and backboards. Its factory is located in Farwest Missouri. Most orders come from individuals and small mom and pop shops. They currently ship 11,000 hoops and backboards a year. Today every hoop set goes separately. They ship the wheel sets LTL on Fedex and each shipment costs $100.00. Because of competition from Amazon they are compelled to offer free shipping. Currently there is no middle...
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