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$14\mathrm{.}1.$ A company normally ships $to$ a customer $by$ rail $at$ a cost $of$ $$400$ per load. The transit time is $15$ days. The goods can be shipped by truck for $$700$ per load and a transit time of four days. If transit inventory cost is $$36$ per day, what does it cost to ship each way?

Answer. Rail, $$940$; truck, $$844$

$14\mathrm{.}2.$ A company manufactures component parts for machine tools in North America and ships them to Southeast Asia for assembly and sale in the local market. The components are shipped by sea, transit time averages six weeks, and the shipping costs $$2700$ per shipment. The company is considering moving the parts by air at an estimated cost of $$7500$; the shipment taking two days to get there. If inventory carrying cost for the shipment in transit costs $$100$ per day, should they ship by air?

Why should the fact that forecasts are more accurate for nearer periods of time be considered? What activities are affected by the shorter lead time?

$14\mathrm{.}3.$ For a given commodity, the line haul cost is $$13$ per mile. For a trip of $200$ miles and a shipment of $300lbs.,$ what is the cost per pound? If the shipment is increased to $400lbs.,$ what is the saving in cost per pound?

Answer. $$2\mathrm{.}17$ per lb$.$

$14\mathrm{.}4.$ A company ships a particular product to a market located $1600$ miles from the plant at a cost of $$4\mathrm{.}50$ per mile. Normally it ships $350$ units at a time. What is the line haul cost per unit?

$14\mathrm{.}5.$ In problem $14\mathrm{.}4,$ if the company can ship the units unassembled, it can ship $550$ units in a truck. What is the line haul cost per unit now?

$14\mathrm{.}6.$ A company processes feathers and ships them loose in a covered truck. The line haul cost for an average shipment is $$600,$ and the truck carries $2000$ pounds of feathers. A bright new graduate has just been hired and has suggested that they should bale the feathers into $500-$pound bales. This would make them easier to handle and also allow them to be compressed into about one$-$tenth of the space they now occupy. How many pounds of feathers can the truck now carry? What is the present line haul cost per pound? What will it be if the proposal is adopted?