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An e-commerce company located in Alabama is considering two options for delivery of customer orders. The first option is to ship the goods directly to customers in the USA using trucks. The second option is to ship the goods to a 3PL in Atlanta via rail and have the 3PL ship the goods to customers using the best mode of transportation. Given the data below for 200,000 units, what is the "equivalence point" for the two options in units? Option 2 - Ship from Alabama Option 1- Ship Directly to to 3PL and then from 3PL to Customers from Alabama Customers Cost of transportation via rail $0 $50,000 Cost of transportation via truck $650,000 $530,000 Material handling cost at the e- commerce company's warehouse $150,000 $0 Order fulfillment fee charged by 3PL company $0 $20,000 Fixed cost $10,000 $50,000 TOTAL COST: $810,000 $650,000

An e-commerce company located in Alabama is considering two options for delivery of customer orders. The first option is to ship the goods directly to customers in the USA using trucks. The second option is to ship the goods to a 3PL in Atlanta via rail and have the 3PL ship the goods to customers using the best mode of transportation. Given the data below for 200,000 units, what is the "equivalence point" for the two options in units? Option 2 - Ship from Alabama Option 1- Ship Directly to to 3PL and then from 3PL to Customers from Alabama Customers Cost of transportation via rail $0 $50,000 Cost of transportation via truck $650,000 $530,000 Material handling cost at the e- commerce company's warehouse $150,000 $0 Order fulfillment fee charged by 3PL company $0 $20,000 Fixed cost $10,000 $50,000 TOTAL COST: $810,000 $650,000

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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O 260,000 units 100,000 units 200,000 units O 40,000 units
Transcribed Image Text:O 260,000 units 100,000 units 200,000 units O 40,000 units
An e-commerce company located in Alabama is considering two options for delivery of customer orders. The first option is to ship the goods directly to customers in the USA using trucks. The second option is to ship the goods to a 3PL in Atlanta via rail and have the 3PL ship the goods to customers using the best mode of transportation. Given the data below for 200,000 units, what is the "equivalence point" for the two options in units? Option 1- Ship Directly to Option 2 - Ship from Alabama to 3PL and then from 3PL to Customers from Alabama Customers Cost of transportation via rail $0 $50,000 Cost of transportation via truck $650,000 $530,000 Material handling cost at the e- commerce company's warehouse $150,000 $0 Order fulfillment fee charged by 3PL company $0 $20,000 Fixed cost $10,000 $50,000 TOTAL COST: $810,000 $650,000
Transcribed Image Text:An e-commerce company located in Alabama is considering two options for delivery of customer orders. The first option is to ship the goods directly to customers in the USA using trucks. The second option is to ship the goods to a 3PL in Atlanta via rail and have the 3PL ship the goods to customers using the best mode of transportation. Given the data below for 200,000 units, what is the "equivalence point" for the two options in units? Option 1- Ship Directly to Option 2 - Ship from Alabama to 3PL and then from 3PL to Customers from Alabama Customers Cost of transportation via rail $0 $50,000 Cost of transportation via truck $650,000 $530,000 Material handling cost at the e- commerce company's warehouse $150,000 $0 Order fulfillment fee charged by 3PL company $0 $20,000 Fixed cost $10,000 $50,000 TOTAL COST: $810,000 $650,000
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