Packed with plump morsels of Washington state farm apples and our trademark spice blend, this juicy sausage is so tasty, it could almost be called addictive (in a healthy way, of course). Try it grilled with a Dijon, garlic and honey glaze.
Its cost per order is $400 and its carrying cost unit is $10 per unit per annum. The company has a demand for 20,000 units per year. Calculate the order size, total orders required during a year, total carrying cost and total ordering cost for the year.
Now, to make the math easy, let's say you only transport out-bound from the Elkhart area (no back hauls as that is harder to quantify for our purposes), and your loaded miles are 50,000 per year. Your truck payment is $500 / month or $6,000 per year. That makes your per mile truck payment $0.12 per mile ($6,000 / 50,000). Your insurance is then $0.012 per mile ($600 / 50,000). Total Fixed Costs = $0.142 / mile ($0.12 + $0.012)