A manufacturer has been shipping his product (moderately heavy machines), mounted only on skids without complete crating. To avoid crating he must ship in freight cars which contain only his machines. To do this he must pay freight on a car capacity load of 42 tons regardless of whether or not the car is completely full. In the past he actually has shipped only 30 tons in each car. The carload freight rate is P4.10 per hundred pounds. If the machine is crated so that they can be shipped in mixed car lots, along with other merchandise, they can be shipped at a rate of P4.20 per hundred pounds with the freight bill computed only on the actual weight shipped. The cost of crating would be P25 per machine and would increase the shipping weight from 1,200 to 1,220 pounds per machine. Which procedure should be followed? (1 ton = 2,200 lbs)

A manufacturer has been shipping his product (moderately heavy machines), mounted only on skids without complete crating. To avoid crating he must ship in freight cars which contain only his machines. To do this he must pay freight on a car capacity load of 42 tons regardless of whether or not the car is completely full. In the past he actually has shipped only 30 tons in each car. The carload freight rate is P4.10 per hundred pounds. If the machine is crated so that they can be shipped in mixed car lots, along with other merchandise, they can be shipped at a rate of P4.20 per hundred pounds with the freight bill computed only on the actual weight shipped. The cost of crating would be P25 per machine and would increase the shipping weight from 1,200 to 1,220 pounds per machine. Which procedure should be followed? (1 ton = 2,200 lbs)

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section: Chapter Questions

Problem 47P

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