Suppose a shipment of 20,000 lbs is originated from point I. An additional 50,000 lbs is to be combined with it at point J and both shipments are to move on to point K. The transportation rate from point I to point J is $0.5/cwt. The transportation rate from point J to point K is $0.2/cwt. The transportation rate from point I to point K is $0.6/cwt. The stop-off charge is $30. Set 1 cwt = 100 lbs.
a) How much is the total transportation cost when transit privilege is not used? Please provide at least one step of calculation and the correct cost for full credit.
b) How much is the total transportation cost when transit privilege is used? Please provide at least one step of calculation and the correct cost for full credit.