Microtech Incorporated has decided to package its cell phone in a smaller, recyc
ID: 384366 • Letter: M
Question
Microtech Incorporated has decided to package its cell phone in a smaller, recyclable package. Additionally, the company will discontinue the practice of shipping each phone with a 250-page user manual and instead will make the manual available online. These changes will result in a lighter, but more difficult package for shippers to handle. The weight of each packaged phone has dropped from 1.5 pounds to 0.5 pounds as a result of these changes and the freight classification has worsened from 65 to 77.5. Use the table below to calculate the difference in Microtech's monthly shipping charges if the company ships 10,000 phones per month
QUESTION:
Before the changes in packaging, shipping costs are ____?__per month. (Enter your response rounded to two decimal places.)
After the changes in packaging, shipping costs are _____?___per month. (Enter your response rounded to two decimal places.)
Thus, the new packaging will raise shipping costs by ____?_____per month. (Enter your response rounded to two decimal
places.)
Matrix of Weight Breaks and Freight Class ($/cwt) Class 50 500 (lbs) 25.73 27.71 29.69 31.46 33.48 36.08 38.93 41.92 45.2 1,000 (lbs) 18.19 19.59 20.99 22.25 23.67 25.51 27.53 29.64 31.96 2,000 (lbs) 17.28 18.62 19.95 21.14 22.49 24.24 26.15 28.17 30.38 5,000 (lbs) 13.19 14.2 15.22 16.12 17.16 18.49 19.95 21.48 23.17 10,000 (lbs) 11.81 13.06 14.31 15.2 16.46 17.89 19.68 21.29 23.08 220,000 (lbs) 7.85 8.69 9.52 10.11 10.94 11.9 13.09 14.15 15.35 500 (lbs) 60 65 70 77.5 85 92.5 100 21.24 22.88 24.52 25.98 27.65 29.79 32.15 34.61 37.33Explanation / Answer
Assume monthly demand is shipped together Old New Weight per package (lbs) 1.5 0.5 Nos. of phones shipped per month 10000 10000 Total weight 15000 5000 Freight classification 65 77.5 Freight $/cwt as per matrix 15.51 18.49 Total Cost 2326.000 924.500 Decrease in cost 1401.500 Freight $/cwt for 15000 lbs is calculated as under $/cwt For 10000 lbs 15.2 For next 5000 lbs 16.12 Wt average 15.50667