Answer:
The total cost involved in shipping the containers to country U.S is $2,594,930
Explanation:
Consider the following information regarding Company WWG:
Total Current volume (CBM) = 190,000
Direct shipping percentage = 0.89
Direct ship Volume (CBM) = 169,100
Consolidation center volume = 190,000 - 169,100 = 20,900
Calculate the shipping cost of the company as shown below:
Shipping Cost calculations
Direct ship 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 used 85% 85%
Container center by container type
Volume (%) = 100
Volume (CBM) = 20,900
Container capacity used = 96%
Container capacity (CBM) (34)
Container shipped = 35,511/ (34*0.85) =1,229
Shipping Cost per container = $480
Shipping Cost by container size ($) = 1,229*480 4589,920
Container capacity (CBM) (67)
Container shipped = 133,589/ (0.85*67) + 20,900/ (0.96*67) = 2,671
Shipping Cost per container = $600
Shipping Cost by container size ($) = 2,671*600 = $1,602,600
Calculate the total shipping cost as shown below:
Total shipping cost = $589,920+$1,602,600 = $2,192,520
Calculate the consolidation center operating cost as shown below:
Number of centers = 4
Annual fixed cost per center = $75,000
Total annual fixed cost = $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 costs = $300,000+$102,410= $402,410
Calculate the total cost involved in shipping containers to the Country U as shown below:
Total Cost = Total Shipping Cost + Total Annual Consolidation center Cost
= $2,192,520 + $402,410
= $2,594,930
Hence, the total cost involved in shipping the containers to country U.S is $2,594,930.
