HELP PLEASE WITH THESE 6 QUESTIONS AND PLEASE FOLLOW
THE INSTRUCTIONS. ALSO PLEASE DO NOT PUT SOMEONE ELSES WORK BECAUSE
THE DATE IS DIFFERENT, I NEED THE ANSWERS WITH THE UPDATED NUMBER
FROM THE WEBSITES. I APPRECIATE IT. THANKS
Because motor freight classifications are not static but change
over time, it is suggested that students visitwww.nmfta.org a
website that provides up-to-date information on the National Motor
Freight Classification (NMFC).
Once in the website:
Click on NMFC link at the top of the page.
Then Look for Classification Making Procedures, click on this
link
Then Look for CCSB Density & Value link (you can use this
information for question 1)
You can also look for CCSB Procedures (complete version) – explore
this link for more information regarding the rate
classifications
Question 1 Hint (Density is of Prime importance in the assignment
of classes)
As you respond to the case questions make sure you consider the
four factors used to determine a product’s freight classification;
Density, Stowability, Ease of Handling & Liability to damage
and theft.
CHIPPY POTATO CHIP COMPANY CASE
Chippy Potato Chip Company Located in Reno ,Nevada ,since 1947 ,the
Chippy Potato Chip Company manufactured potato chips and
distributed them with a 100-mile radius of Reno. It used its own
trucks for delivery in the Reno ,Carson City , and Lake Tahoe area
and common carrier trucking for all other outgoing shipments. All
of its motor carrier shipments were on an LTL basis. The applicable
motor carrier freight rating, or classification, for LTL potato
chips was 200. This classification was high, although potato chips
are often given as textbook examples of bulky freight that will
cause a truck to cube out. Even after much of the motor carrier
industry was deregulated, Chippy had difficulty finding contract
interested in negotiating specific contract rates. This was because
potato chips – as a result of their bulk – were not a desirable
cargo from the trucker’s point of view.
The potato chips were packed in bags containing 8 ounces of chips.
Twenty-four 8 ounce bags were packed in cartons that were 12 inches
by 12 inches by 36 inches. The packed carton weighed 14 pounds. The
8-ounce bags of chips wholesaled FOB plant for 40 cents each and
retailed at 59 cents.
Recently the Chippy firm acquired rights to produce a new type of
chip, made from powdered potatoes yielding chips of identical shape
that could be packed tubular containers. A 5 ounce paper tube of
chips would wholesale (FOB plant) at 40 cents and retail for 59
cents. The new chips were much less bulky: twenty-four 5 ounce
containers could be packed in a carton measuring 1 cubic foot. The
filled carton weighed 10 pounds. Chippy management belived that
since the new chips were less bulky, the LTL classification on of
200 was too high. Management decided to ask the motor carrier
classification. ( Motor carrier rates for a movement are the
classification multiplied by a distance factor. If the
classification were lowered, the rates would be loweree
proportionally for all shipments.)
Question 1: If you worked for Chippy, what new classification would
you ask for? Give your reasons.
Question 2: Classifications are based on both cost and value of
service. From the carriers’ standpoint, how has
cost of service changed?
Question 3: Given the existing LTL classification of 200, how has
value of service to the customer changed?
Question 4: The new tubular containers are much sturdier. If you
worked for Chippy, how—if at all—would you argue that this factor
influences classification?
Question 5: You work for the motor carrier classification bureau
and notice that the relationship between the
weight of potato chips and the weight of packaging has changed.
How, it at all, should this influence changes in
the product’s classification?
Question 6: One of Chippy’s own trucks, used for local deliveries,
has two axles and an enclosed body
measuring (inside) seven feet by eight feet by twenty feet and is
limited by law to carrying a load of no more
than 8,000 pounds. Because the truck is not supposed to be
overloaded, what combinations, expressed in terms
of cartons of each, of new- and old-style chips can it legally
carry? (Hint: use a piece of graph paper.)