An e-commerce company located in Alabama is considering two options for delivery of customer orders. The first option is to ship the goods directly to customers in the USA using trucks. The second option is to ship the goods to a 3PL in Atlanta via rail and have the 3PL ship the goods to customers using the best mode of transportation. Given the data below for 200,000 units, what is the "equivalence point" for the two options in units? Option 2 - Ship from Alabama Option 1- Ship Directly to to 3PL and then from 3PL to Customers from Alabama Customers Cost of transportation via rail $0 $50,000 Cost of transportation via truck $650,000 $530,000 Material handling cost at the e- commerce company's warehouse $150,000 $0 Order fulfillment fee charged by 3PL company $20,000 Fixed cost $10,000 $50,000 TOTAL COST: $810,000 $650,000
An e-commerce company located in Alabama is considering two options for delivery of customer orders. The first option is to ship the goods directly to customers in the USA using trucks. The second option is to ship the goods to a 3PL in Atlanta via rail and have the 3PL ship the goods to customers using the best mode of transportation. Given the data below for 200,000 units, what is the "equivalence point" for the two options in units? Option 2 - Ship from Alabama Option 1- Ship Directly to to 3PL and then from 3PL to Customers from Alabama Customers Cost of transportation via rail $0 $50,000 Cost of transportation via truck $650,000 $530,000 Material handling cost at the e- commerce company's warehouse $150,000 $0 Order fulfillment fee charged by 3PL company $20,000 Fixed cost $10,000 $50,000 TOTAL COST: $810,000 $650,000
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 5.1SC: Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing...
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