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Stanley Harris, traffic manager of This n’ That Manufacturers, is considering the negotiations of a freight-all-kind (FAK) rate for shipment between Atlanta and Lansing. The company ships 200 (class 65) shipments of 5,000 lb., 40 (class 400) shipments of 1,200 lb., and 30 (class 100) shipments of 10,000 lb., and receives a 45% discount on published rates.
a) Refer to Table 8.8 to determine the current freight bill for the above shipments.
Note: Take the discount from the published rate and round up for the applicable hundredweight rate.
b) Should Mr. Harris accept a FAK rate of $10 per hundredweight?
c) What factors aside from price should Mr. Harris consider with a FAK rate?
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