Assume you are Vanderpool. Draft the comparison Pon just requested.

Which of the two routing alternatives would you recommend? Why?

Assume that the buyer in Saudi Arabia has made other large purchases in the United States and is

considering consolidating all its purchases and loading them onto one large ship, which the buyer will

charter. The buyer contacts HDT and, although acknowledging its commitment to buy FAS Doha, asks $1$

much HDT would subtract from the $$172,000$ per truck price if the selling terms were changed to FOB $H$

Crown Point plant. How much of a cost reduction do you think HDT should offer the buyer? Under what

terms and conditions?

Answer question $3$ with regard to changing the terms of sale to delivery at port in Baltimore. The buye

would unload the trucks from the railcars.

Is there an interest rate that would make HDT change from one routing to another? If so$,$ what is it$?$

Assume that the cost to HDT of borrowing money is $12$ percent per year. Because the buyer will pay

trucks as they are delivered, would it be advantageous for HDT to pay overtime to speed up production

ship the trucks as they are finished via the Port of Baltimore, and collect its payment earlier? Why or w

not?

Case $12\mathrm{.}1$ HDT Truck Company

HDT Truck Company has been located in Crown Point, Indiana, since $1910.$ Its only products$-$large trucks$-$ar

to individual customer specifications. The firm once produced automobiles but dropped out of the auto business

The firm nearly went out of business in the late $1930$s$,$ but by $1940$ its fortunes were buoyed by receipt of several

contracts for tank retrievers$-$large$-$wheeled vehicles that can pull a disabled tank onto a low trailer and haul it to

location where it can be repaired.

Since World War II$,$ HDT had manufactured only large off$-$road vehicles, including airport snowplows, airport c

trucks, oil$-$field drilling equipment, and the like. HDT purchased all components from small manufacturers that w

clustered in the Milwaukee$-$Detroit$-$Toledo$-$Cleveland area. Essentially, all HDT did was assemble components

specialized vehicles containing the combinations of frame, transmission, axles, cab, and other equipment neces

do the job. The assembly line was relatively slow. After wheels were attached to the frame and axles, the night

force would push the chassis along to its next station on the line so it would be in place for the next day's shift.

one shift, two trucks could be assembled each day. If large orders for identical trucks were involved, it was pos

assemble three trucks per day. Quality declined whenever the pace quickened.

HDT officials had decided they could not grow and became satisfied with their niche in the very$-$heavy$-$truck

With only two exceptions, since $1970,$ HDT had always had at least a four$-$month backlog of orders. In the $1960$

market had been airports, but since $1980$ its best market had been for oil$-$field equipment, first for the North Slc

Alaska and then for the Middle East. The U$.$S$.$ military was also a regular customer.

In late $2002,$ HDT received an order for $50$ heavy trucks to be used in the oil fields of Saudi Arabia. The term

were delivery on or before July $1,2003,$ at the Port of Doha, Saudi Arabia. Specifically, HDT would receive $$17$

truck in U$.$S$.$ funds FAS $($free alongside ship$)$ at the discharging vessel in Doha, which meant that HDT was re

for all transportation costs up until the time and point the trucks were discharged from the ship's tackle at Doh

each truck was unloaded, HDT would be paid for it$.$Question $1$ Assume you are Vanderpool. Draft the comparison Pon just requested.

Question $2$ Which of the two routing alternatives would you recommend? Why?

Question $3$ Assume that the buyer in Saudi Arabia has made other large purchases in the United States and is considering consolidating all its purchases and loading them onto one large ship, which the buyer will charter. The buyer contacts HDT and, although acknowledging its commitment to buy FAS Doha, asks how much HDT would subtract from the $$172,000$ per truck price if the selling terms were changed to FOB HDT$\text{'}$s Crown Point plant. How much a cost reduction do you think HDT should offer the buyer? Under what terms and conditions?

Question $4$ Assume that the cost to HDT of borrowing money is $12\%$ per year. Because the buyer will pay for trucks as they are delivered, would it be advantageous for HDT to pay overtime to speed up production, ship the trucks as they are finished vias the Port of Baltimore, and collect its payment earlier? Why or why not?