Transportation solution plus | Accounting homework help

“Decision Analysis : Case Problem 1 :Transportation- Solution Plus
Solution Plus is an industrial chemicals company that produces specialized cleaning fluids and solvents for a wide variety of applications. Solution Plus just received in invitation to submit a bid to supply Great North American railroad with a cleaning fluid for locomotives. Great North American needs the cleaning fluid at 11 location (railway stations); it provided the following information to Solution Plus regarding the number of gallons of cleaning fluid required at each location (see Table 10.9).

The Solution Plus can produce the cleaning fluid at its Cincinnati plant for $1.20 per gallon. Even though the Cincinnati location is its only plant, Solution Plus has negotiated with an industrial chemicals company located in Oakland, California, to produce and ship up to 50,000 gallons of the locomotive cleaning fluid to selected Solution Plus customer locations. The Oakland company will charge Solution Plus $1.65 per gallon to produce the cleaning fluid, but Solution Plus think that the lower shipping costs from Oakland to some customer locations may offset the added cost to produce the product.

The president of Solution Plus , Charlie Weaver, contacted several trucking companies to negotiate shipping rate between the two production facilities (Cincinnati and Oakland) and the location where the railroad locomotives are cleaned. Table 10.10 shows the quotes received in term of dollars per gallon. The—– entries in Table 10.10 identify shipping routes that will not be considered because of the large distances involved. These quotes for shipping rate are guaranteed for one year.

To submit the bid to the railroad company, Solution Plus must determine the price per gallon they will charge. Solution Plus will usually sells it cleaning fluids for 15% more than it cost to produce and deliver the product. For this big contract, however, Fred Roedel, the director of marketing, suggested that maybe the company should consider a smaller profit margin. In addition, to ensure that if Solution Plus wins the bid, they will have adequate capacity to satisfy existing orders as well as accept orders for other new business, the management team decided to limit the number of gallons of the locomotive cleaning fluid produced in the Cincinnati plant to 500,000 gallons at most. 

Location Gallons Required Location Gallons Required

Santa Ana 22,418 Glendale 33,689
El Paso 6,800 Jacksonville 68,486
Pendelton 80,290 Little Rock 148,586
Houston 100,447 Bridgeport 111,475
Kansas City 241,570 Sacramento 112,000
Los Angeles 64,761

Cincinnati Oakland
Santa Ana – 0.22
El Paso 0.84 0.74
Pendelton 0.83 0.49
Houston 0.45 –
Kansas City 0.36 –
Los Angeles – 0.22
Glendale – 0.22
Jacksonville 0.34 –
Little Rock 0.34 –
Bridgeport 0.34 –
Sacramento – 0.15

Managerial Report
You are asked to make recommendations that will help Solution Plus prepare a bid. Your report should address, but not be limited to, the following issues:
1. If Solution Plus win the bid, which production facility (Cincinnati or Oakland) should supply the cleaning fluid to the locations where the railroad locomotives are cleaned? How much should be shipped from each facilitity to each location?

2. What is the breakeven point for Solution Plus? This is , how can the company go on its bid without losing money?

3. If Solution Plus wants to use its standard 15% markup, how much should it bid?

4. Freight costs are significantly affected the price of oil. The contract on which Solution Plus is bidding is for to years. Discuss how fluctuation in freight costs might affect the bid Solution Plus submits.

Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

We value our customers and so we ensure that what we do is 100% original..
With us you are guaranteed of quality work done by our qualified experts.Your information and everything that you do with us is kept completely confidential.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

The Product ordered is guaranteed to be original. Orders are checked by the most advanced anti-plagiarism software in the market to assure that the Product is 100% original. The Company has a zero tolerance policy for plagiarism.

Read more

Free-revision policy

The Free Revision policy is a courtesy service that the Company provides to help ensure Customer’s total satisfaction with the completed Order. To receive free revision the Company requires that the Customer provide the request within fourteen (14) days from the first completion date and within a period of thirty (30) days for dissertations.

Read more

Privacy policy

The Company is committed to protect the privacy of the Customer and it will never resell or share any of Customer’s personal information, including credit card data, with any third party. All the online transactions are processed through the secure and reliable online payment systems.

Read more

Fair-cooperation guarantee

By placing an order with us, you agree to the service we provide. We will endear to do all that it takes to deliver a comprehensive paper as per your requirements. We also count on your cooperation to ensure that we deliver on this mandate.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages