2. The table below provides shipping rates for packages using next day (1-day) air or 5-day ground service options. The rates vary according to the weight of the package. Suppose you have a package weighing 13 pounds that needs to be shipped. The value of the material is $15,000 and the annual inventory holding rate is 35 percent of the product value. Weight 1-5 lbs. 6-10 lbs. 11-15 lbs. 16-20 lbs. Next Day Air (Cost per Pound) $3.25 $4.75 $6.25 $7.75 5-Day Ground (Cost per Pound) S0.65 $0.85 $1.25 $1.85 a. What is your total cost if you use the ground carrier? The air carrier? Which transportation mode (air or ground) minimizes the total shipping and transit inventory cost? b. Describe the cost-to-service and cost-to-cost trade-offs that are involved in the transportation service selection decision. What trade-offs would be involved in choosing one shipping option over the other? 3. Suppose Jones Company has orders from three customers located in the same market area. One order has a total weight of 6,000 pounds, the second weighs 9,000 pounds, and the third weighs 16,000 pounds. The transportation carrier quotes the following rates: Shipment Weight Cost per 100 Pounds 1,000-4,999 lbs. $22.00 5,000-9,999 lbs. $19.50 10,000-14,999 lbs. $17.00 15,000-19,999 lbs. $14.00 20,000 lbs. or more $12.50 a. If the orders are combined into one shipment, the carrier will charge $250 for each stop it is required to make. Should Jones consolidate the three shipments? b. Describe the benefits and trade-offs related to consolidation. How do consolidation strategies take advantage of economies of scale and distance? How is consolidation related to the cost-to-service and cost-to-cost trade-offs