Introduction to Materials Management 8th Edition by Steve Chapman ,Tony Arnold ,Ann Gatewood ,Lloyd Clive

Exercise 6

A company processes feathers and ships them loose in a covered truck. The line haul cost for an average shipment is $600, and the truck carries 2000 pounds of feathers. A bright new graduate has just been hired and has suggested that they should bale the feathers into 500-pound bales. This would make them easier to handle and also allow them to be compressed into about one-tenth of the space they now occupy. How many pounds of feathers can the truck now carry? What is the present line haul cost per pound? What will it be if the proposal is adopted?