Question

In the Illinois Quality Parts case study, we first ran the baseline model with a rate of $2/mile for all lanes. Figure 8.14 shows the output of this scenario, showing total cost and total miles traveled out of each warehouse.
a. Even though we applied a rate of $2/mile, the table (total cost / total miles) shows a rate higher than $2/mile for all warehouses. Why is that? (Hint: Think about the fact that the true transportation rates include minimum charges.)


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  • CreatedOctober 29, 2015
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