Consider a freight consolidation problem where a supplier located in Kansas City (KC) delivers merchandise to three retailers (customers) located in Denver, Salt Lake City, and Los Angeles. The daily shipment volumes for the three customers for three consecutive days are as follows.

The transportation rates ($/cwt) from KC to customer locations are as follows (1 cwt = 100 lbs).

The supplier currently has dedicated trucks for each of the three customers and delivers daily to each of the three customers.

Next consider a freight consolidation problem, called geographical consolidation, where the supplier uses a single truck to deliver shipments to all three customers daily. A truck, then, travels the route Kansas City-Denver-Salt Lake City-Los Angeles daily, delivering shipments to all three customers. Assume that the trucks are large enough to accommodate the demands for all three customers for a day. The transportation rate for the route is as follows.

Given the shipment volume and shipment rates, geographical consolidation results in a lower total freight cost than temporal consolidation. True or False?

Group of answer choices

True

False