Could you please read the case and then answer all three questions at the bottom throughly. Thank you so much!

Elise Lovejoy, the new logistics coordinator at Spartan Spartan Plastics-Background Information Plastics, was looking at the stack of papers and the two computer screens in front of her. It was Friday afternoon Spartan Plastics was a medium-sized producer of high- the Friday before the long weekendand she still had not quality, highly engineered plastic components. These com- come to a resolution. She knew that first thing Tuesday ponents were typically found on the interior of most trucks morning she would have a meeting with Bob Barley, CEO and cars. They tended to come in a variety of colors and and major owner of Spartan Plastics. The issue that they finishes everything from small door panels to panels that would be discussing: how to get the increasing shipping looked like wood. Typically, their critical major custom- costs under control. With the forecasts for the upcoming ers consisted of the Big Three (General Motors, Ford, and year looking promising, shipping volumes were expected Chrysler) and were located in the Detroit-Toledo-Lansing to increase by 10 to 25 percent. Consequently, the shipping area. During the last year, Spartan Plastics had shipped costs had to be addressed because, simply put, they were approximately 10,000 pounds of components per day to too high each assembly plant served. Located in St. Louis, Missouri (where the company was in Toledo. The carrier's charge for the milk-run approach known for its aggressive policy of recruiting minorities for would be based on distance only with a charge of $6.00 per its workforce and for its progressive supplier diversification truck mile, plus a stop-off charge of $250/stop, including program), Spartan Plastics employed 450 people: 200 direct the final stop in Toledo. assembly line employees, 150 engineers, and 100 others. Amalgamated Integrated Services (AIS): The second Originally begun in 1976, the company had grown proposal came from AIS, which could provide both trans- quickly. However, management's primary focus was on portation and cross-docking capability. AIS proposed to engineering and product design. Management's mantra handle deliveries to the various automotive plants by con- was simple and known to everyone: high-quality compo- solidating the shipments into a full truckload in St. Louis. nents, designed right, built right, sold at a fair price, and This full truckload would then travel from St. Louis to delivered on time. Ypsilanti, Michigan, where the shipment would then be broken down into cross-docked shipments for delivery to The Shipping Problem the appropriate assembly plants (again handled by AIS). Logistics and shipping, as a result, were traditionally not AIS established a cost of $6.00 per mile to the cross-dock a high priority at Spartan Plastics. Until recently, shipping facility and then a flat cost per delivery to each assembly was seen as simply being a clerical task. Consequently, this plant from Ypsilanti of $500. responsibility was assigned to a shipping clerk who simply together a mileage table for all of the relevant origin/ To help in evaluating these two proposals, Elise put called a local shipping company. Unsurprisingly, shipping destination points. She also knew that she would have to costs tended to be high. In the past, Spartan Plastics had used an LTL carrier felt that there were some potential qualitative and service consider the cost implications of the alternatives. Yet, she from its plant to each of the assembly plants. The carrier considerations present as well. charged Spartan Plastics $0.05 per hundredweight per mile. What this policy meant was that to ship one day's worth of components to the Lansing plant, for example, it would cost Origin Destination Distance Spartan Plastics $2,435 (over $600,000 per year). St. Louis, Mo Lansing, MI 487 miles With its customers becoming more cost sensitive, top St. Louis, MO Detroit, MI 552 miles management agreed that something had to be done. The first step was to increase the "professionalism" of the logis- St. Louis, MO Toledo, OH 499 miles tics and shipping department. One of the first actions trig- Lansing, MI Detroit, MI 88 miles gered by this step was the hiring of Elise Lovejoy. Elise had Detroit, MI Toledo, OH 65 miles previously worked as a manager in a shipping department of a local St. Louis company that was widely respected for St. Louis, MO Ypsilanti, MI 521 miles its expertise in this area. Upon arriving at Spartan Plas- tics, Elise undertook an assessment. After three weeks, As Elise proceeded to turn off her computer and to she agreed with top managementthe shipping costs were put the various notes and calculations into her briefcase, simply too high; there were no controls on them. she knew that on Tuesday, she would have to be ready Consequently, she approached several Midwestern with a comprehensive, well-reasoned analysis and set of logistics/shipping companies and asked them to submit recommendations. proposals in response to her RFQ (request for quotes). After an initial screening review, she identified two pro- Questions posals that seemed to be highly attractive. 1. What are the cost implications of each delivery Consolidated Shipping LLC (CS): The first proposal option? recommended a consolidated delivery approach. That is, 2. What are the qualitative and service characteristics of CS would consolidate the three shipments into one 30,000- each delivery option? pound truckload. The carrier would then use a milk-run 3. Based on your analysis, what would you recommend approach in which the truck would stop first at the Lan- to Bob Barley? sing assembly plant, then continue on to Detroit, and finish m