New Madrid Chocolate Corporation manufactures bulk chocolate that it sells to Venus Candy Company. Currently, New Madrid packages and ships their bulk chocolate in 50-pound bars that are then shipped by truck to Venus. Venus then unpacks the bars, disposes of the packaging, melts the bars, and works the chocolate into smaller retail products. An astute and environmental conscientious employee observes that New Madrid could make the chocolate keep it hot or warm and ship it in heated train tanker cars to Venus rather than by truck as they do now. This would save cooling and reheating energy cost, packaging cost and time associated with these activities. Assume the following cost:

1. Existing cooling cost and time for New Madrid $12,000
2. Existing packaging cost for New Madrid $15,000
3. Existing annual transportation cost by truck $65,000 paid by New Madrid
4. New annual transportation cost by train $50,000 paid by New Madrid (if implemented)
5. Existing unpackaging and disposal cost of packaging for Venus $8,000
6. Existing reheating cost and time for Venus $33,000

How much will New Madrid gain if they approach Venus and Venus agrees to implement this "activity-reducing" plan?

How much will Venus benefit financially by implementing this plan?

Answer rating: 100% (QA)

Answer To evaluate the potential financial benefits for New Madrid Chocolate Corporation and Venus C... View the full answer