A company ships dog houses fully assembled to luxury dog hotels. The average line- haul cost per shipment is $12.50 per mile and the truck carries 100 assembled large dog houses. The company decided to ship the houses unassembled and figures it can ship 500 in a truck. Calculate the line- haul cost per assembled and unassembled dog house. If the average trip is 300 miles, calculate the potential savings per dog house.

Question

Quizplus · Accepted Answer

The Answer is Line- haul cost assembled = $12.50/100 = $0.125 per dog house per mile Line- haul cost unassembled = $12.50/500 = $0.025 per dog house per mile
Savings per mile = $0.125 - 0.025 = $0.10
Trip savings = 300 * $0.10 = $30.00 per dog house

A Company Ships Dog Houses Fully Assembled to Luxury Dog