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Question: exercise 5 charging for storage and handling please use table...

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Exercise 5. Charging for storage and handling Please use table 12.5 on p. 358 of the Richards book for this exercise without any changes given in exercise 4. Assume that the cost of one pallet storage is $10 per week, inbound (intake) handling is $2.50 per pallet and the cost of outbound handling (dispatch) is S4.00 per pallet. All overhead is applied at a rate of 20% to both storage and handling. Assume the week consists of seven days, Monday through Sunday. In a closed-book contract where charges are billed on a weekly basis and include 15% profit applied to all costs, the 3PL uses minimum daily average pallet storage requirement of 100 pallets and minimum weekly inbound and outbound handling requirements of 350 pallets each to base the charges on if the actual daily average usage numbers are below the minima. The charges on the bill are itemized as storage, inbound handling, and outbound handling. 16. What will the customer be billed for storage for that week if the parties use the average daily pallet method (scenario 2)? 17. What is the agreed contract charge (price) per storage of one pallet per week? 18. What will the customer be billed for inbound handling for that week? 19. What is the total charge for that week? 20. In an ope n book or cost-plus contract, a total profit may be the last item on the bill after the cost subtotal. What will this profit line item be under these conditions for that week? 21. Bonus (extra credit) question. Answer question 16 under the modified terms of exercise 4. 22. Bonus (extra credit) question. Answer question 19 under the modified terms of exercise 4.

TABLE 125 Pallet storage charge calculations Number of pallets/days Monday Teeday Wedneday Thurday Priday Saturday Sanday Number of 100 175 200 190 70 70 70 Intake 100 100 50 10 20 20 o Despatches 25 75 60 130 20 20 In scenario 2 the charge will be for 125 pallets, this being the average over the week. In scenario 3 the charge will be for 400 pallets. In scenario 4 the charge will be for 70 pallets Most companies will look for a minimum charge. In this example the minimum charge is likely to be for 100 pallets. In the case of a fixed rental cost per week or month, the client pays a fixed rate cach week or month based on a previously agreed area or number of UoMs. For example, a client may require an area of 1,000 square feet in which to store product and carry out some value-adding services. If the client does not use the whole space they will still be charged the full rate. From the clients point of view they are able to budget accurately each month. If the client exceeds the amount of space agreed they will pay an additional charge.

In scenario 1 Cable 12.5) the charge will be for 200 pallets, this being the highest number in stock that week
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