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Astro Industries of Minneapolis, MN, makes weekly shipments to 16 customers in the Dallas
area. Each customer's order weighs, on average, 1,250 pounds. A direct truck shipment from
Minneapolis to Dallas costs $1,750. The maximum load per truck is 25,000 pounds. a) How
much would it cost Astro to make direct, single-order shipments to all of its customers each
week? What would the utilization level for the trucks look like? (5 points) b) Suppose a Dallas-
based warehousing firm has agreed to run a break-bulk warehousing operation for Astro at a cost
of $120 per hundred-weight. Local deliveries to each customer would tack on another $100 per
customer per week. How much money could Astro save by going with the break-bulk solution?
What would the utilization level for truck be in this case? ( 8 points) c) How high would the
warehousing cost (currently at $120 per hundred-weight) have to be before break-bulk
warehousing is no more attractive than direct shipments? ( 5 points)

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Astro Industries of Minneapolis, MN, makes weekly shipments to 16 cus.pdf

  • 1. Astro Industries of Minneapolis, MN, makes weekly shipments to 16 customers in the Dallas area. Each customer's order weighs, on average, 1,250 pounds. A direct truck shipment from Minneapolis to Dallas costs $1,750. The maximum load per truck is 25,000 pounds. a) How much would it cost Astro to make direct, single-order shipments to all of its customers each week? What would the utilization level for the trucks look like? (5 points) b) Suppose a Dallas- based warehousing firm has agreed to run a break-bulk warehousing operation for Astro at a cost of $120 per hundred-weight. Local deliveries to each customer would tack on another $100 per customer per week. How much money could Astro save by going with the break-bulk solution? What would the utilization level for truck be in this case? ( 8 points) c) How high would the warehousing cost (currently at $120 per hundred-weight) have to be before break-bulk warehousing is no more attractive than direct shipments? ( 5 points)