Contemporary Logistics 11 edition, Chapter 13: Case 13.1, Please answer question 3 and 4.

3. Given the existing LTL classification of 200, how has value of service to the customer changed? 4. The new tubular containers are much sturdier. If you worked for Chippy, how-if at all-would you argue that this factor influences classification? CAL 3: 01 CASE 13.1 Chippy Potato Chip Company Located in Reno, Nevada, since 1947, the Chippy Potato Chip Company manufactured potato chips and distrib- ne uted them within a 100-mile radius of Reno. It used its wa own trucks for delivery in the Reno, Carson City, and rie Lake Tahoe areas and common carrier trucking for all (M other outgoing shipments. All of its motor carrier ship. m ments were on an LTL basis. The applicable motor carrier lo freight rating, or classification, for LTL potato chips was sh 200. This classification was high, although potato chips are often given as textbook examples of bulky freight that o will cause a truck to cube out. Even after much of the motor carrier industry was deregulated, Chippy had dif- ficulty finding contract truckers interested in negotiating specific contract rates. This was because potato chips- as a result of their bulk-were not a desirable cargo from the truckers' point of view. The potato chips were packed in bags contain- ing 8 ounces of chips. Twenty-four 8-ounce bags were packed in cartons that were 12 inches by 12 inches by 36 inches. The packed carton weighed 14 pounds. The 8-ounce bags of chips wholesaled FOB plant for 40 cents each and retailed at 59 cents. Recently the Chippy firm acquired rights to pro- duce a new type of chip, made from powdered potatoes, yielding chips of identical shape that could be packed in tubular containers. A 5-ounce paper tube of chips would wholesale (FOB plant) at 40 cents and retail for 59 cents. The new chips were much less bulky: Twenty-four 5-ounce containers could be packed in a carton measur- ing one cubic foot. The filled carton weighed 10 pounds. (The difference between the weight of chips and that of cartons is due to packaging materials. The carrier is paid on the basis of carton weight.) Chippy management believed that because the new chips were less bulky, the LTL classification of 200 was too high. Management decided to ask the motor car- rier classification bureau for a new, lower classification. (Motor carrier rates for a movement are the classification multiplied by a distance factor. If the classification were lowered, the rate would be lowered proportionally for all shipments.)