Contemporary Marketing 16th Edition by Louis Boone,David Kurtz

Exercise 12

Assume that a product sells for $100 per ton and that Pittsburgh is the basing-point city for calculating transportation charges. Shipping from Pittsburgh to a potential customer in Cincinnati costs $10 per ton. The actual shipping costs of suppliers in three other cities are $8 per ton for Supplier A, $11 per ton for Supplier B, and $10 per ton for Supplier C. Using this information, answer the following questions:
a. What delivered price would a salesperson for Supplier A quote to the Cincinnati customer?
b. What delivered price would a salesperson for Supplier B quote to the Cincinnati customer?
c. What delivered price would a salesperson for Supplier C quote to the Cincinnati customer?
d. How much would each supplier net (after subtracting actual shipping costs) per ton on the sale?