Answer:
The overall expenditure for transporting the containers to the U.S. amounts to $2,594,930
Explanation:
Consider the following details about Company WWG:
Total Current volume (CBM) = 190,000
Percentage shipped directly = 0.89
Volume shipped directly (CBM) = 169,100
Volume at consolidation center = 190,000 - 169,100 = 20,900
To compute the shipping expenses for the company as outlined below:
Shipping Cost calculations
Direct shipping by Container type (in Feet) 20 40
Volume (%) 0.21 0.79
Volume (CBM) = 169,100*0.21 =169,100*0.79
= 35,511 =133,589
Container capacity utilized 85% 85%
Container center by container type
Volume (%) = 100
Volume (CBM) = 20,900
Container capacity used = 96%
Container capacity (CBM) (34)
Containers shipped = 35,511/ (34*0.85) = 1,229
Shipping Cost per container = $480
Shipping Costs by container size ($) = 1,229*480 = $589,920
Container capacity (CBM) (67)
Containers shipped = 133,589/ (0.85*67) + 20,900/ (0.96*67) = 2,671
Shipping Cost per container = $600
Shipping Costs by container size ($) = 2,671*600 = $1,602,600
Calculate the total shipping cost as follows:
Total shipping fees = $589,920 + $1,602,600 = $2,192,520
Determine the operating costs for the consolidation center as follows:
Number of centers = 4
Annual fixed cost per center = $75,000
Total annual fixed costs = $75,000*4 = $300,000
Variable cost per CBM = $4.9
Total annual variable cost = 20,900*$4.9 = $102,410
Total annual consolidation center expenses = $300,000+$102,410 = $402,410
Now compute the complete cost of moving containers to the U.S. as below:
Total Cost = Total Shipping Fees + Total Annual Consolidation center Expense
= $2,192,520 + $402,410
= $2,594,930
Thus, the entire cost involved in shipping the containers to the U.S. is $2,594,930.
