Review for Exam 1

Case 6-1 pages 205-210 Send 17,000 lbs of arch supports from St.

Jo to Green Bay. By rail:

UFC Item 13390 Boot or shoe arch supports• LCL rating 100• CL rating 70 (over 20,000 lbs)

Freight Tariff Rate Bases:St. Jo to Green Bay• 579 Class Rates• at LCL 349 cents per cwt

Case 6-1 Cont’d

at LCL 349 cents per cwt 349 cents/cwt = $3.49/cwt 17,000 lbs = 170 cwt $3.49*170 = $593.30

Should we ship “wind”? at CL 244 cents per cwt 244 cents/cwt = $2.44/cwt 20,000 lbs = 200 cwt $2.44*200 = $488

Case 6-1 Cont’d

Interest Rate 15%/year$21,000 valueLCL takes 10 daysCL takes 6 days4 days interest on $21,000 15%/365*21000 = $8.63 daily interest4 days interest is $34.52

Use Truck?

$0.85/mile588 miles2 daysCost to Green Bay = $499.80Saves additional 4 days interest or $34.52So the relative cost is $465.28 which is

less than CL But…?

From St. Louis

Freight Tariff Rate Bases:St. Louis to Green Bay 458 Class Rates at LCL 307 cents per cwt 307 cents/cwt = $3.07/cwt 17,000 lbs = 170 cwt $3.07*170 = $521.90

Case 6-1 Cont’d

Should we ship “wind”? at CL 215 cents per cwt 215 cents/cwt = $2.15/cwt 20,000 lbs = 200 cwt $2.15*200 = $430