Bowling Green Manufacturing Co.has three orders to be shipped to different customers located in Seattle WA.The weights of each order are: 13,000 pounds, 9,000 pounds, and 10,000 pounds.The cost to ship each order individually is $17 per hundred weight.The shipments can be consolidated into a single order for a cost of $14 per hundred weight with an additional change of $250 per stop.Should the shipments be consolidated?

Question

Quizplus · Accepted Answer

For individual shipments, the total cost would be:

13,000 pounds * $17/100 = $2,210 
9,000 pounds * $17/100 = $1,530 
10,000 pounds * $17/100 = $1,700

Total cost = $2,210 + $1,530 + $1,700 = $5,440

If the shipments are consolidated, the total weight would be:

13,000 + 9,000 + 10,000 = 32,000 pounds

The cost for consolidated shipment, including the additional stop charge, would be:

32,000 * $14/100 + $250 = $4,738

Therefore, the cost would be $702 lower with consolidation, making it the better choice.