Review for Exam 1

1
Review for Exam 1

• Case 6-1 pages 205-210
• Send 17,000 lbs of arch supports from St. Jo to
  Green Bay.
• By rail
• UFC Item 13390 Boot or shoe arch supports
• LCL rating 100
• CL rating 70 (over 20,000 lbs)
• Freight Tariff Rate BasesSt. Jo to Green Bay
• 579 Class Rates
• at LCL 349 cents per cwt

2
Case 6-1 Contd

• at LCL 349 cents per cwt
• 349 cents/cwt 3.49/cwt
• 17,000 lbs 170 cwt
• 3.49170 593.30
• Should we ship wind?
• at CL 244 cents per cwt
• 244 cents/cwt 2.44/cwt
• 20,000 lbs 200 cwt
• 2.44200 488

3
Case 6-1 Contd

• Interest Rate 15/year
• 21,000 value
• LCL takes 10 days
• CL takes 6 days
• 4 days interest on 21,000
• 15/36521000 8.63 daily interest
• 4 days interest is 34.52

4
Use Truck?

• 0.85/mile
• 588 miles
• 2 days
• Cost to Green Bay 499.80
• Saves additional 4 days interest or 34.52
• So the relative cost is 465.28 which is less
  than CL
• But?

5
From St. Louis

• Freight Tariff Rate BasesSt. Louis to Green Bay
• 458 Class Rates
• at LCL 307 cents per cwt
• 307 cents/cwt 3.07/cwt
• 17,000 lbs 170 cwt
• 3.07170 521.90

6
Case 6-1 Contd

• Should we ship wind?
• at CL 215 cents per cwt
• 215 cents/cwt 2.15/cwt
• 20,000 lbs 200 cwt
• 2.15200 430