TransAm Foods Company has five plants where it processes and packages fruits and vegetables. It has suppliers
TransAm Foods Company has five plants where it processes and packages fruits and vegetables. It has suppliers in six cities in California, Texas, Alabama, and Florida. The company has owned and operated its own trucking system in the past for transporting fruits and vegetables from its suppliers to its plants. However, it is now considering transferring all of its shipping to outside trucking firms and getting rid of its own trucks. It currently spends $245,000 per month to operate its own trucking system. It has determined monthly shipping costs (in $1000s per ton) using outside shippers from each of its suppliers to each of its plants, as shown in the following table.
Should National Foods continue to operate its own shipping network or sell its trucks and outsource its shipping to independent truckingfirms?
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