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Example of Shipment Cost Allocation

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Question

Example of Shipment Cost Allocation

Answer

Example of Shipment Cost Allocation

The following example shows how Sterling TMS allocatesthe shipment cost based on the weight of the orders:

  1. The shipment cost is $1000.
  2. The shipment contains three orders that total 2000 pounds:
    • Order A weighs 1000 pounds (50 percent of the total weight).
    • Order B weighs 600 pounds (30 percent of the total weight).
    • Order C weighs 400 pounds (20 percent of the total weight).
  3. Sterling TMS usesthe weight to allocate the $1000 shipment cost:
    • Order A costs $500 (50 percent of the total cost).
    • Order B costs $300 (30 percent of the total cost).
    • Order C costs $200 (20 percent of the total cost).

      This figure is a graphical presentation of the order allocations that are described in list item 3 of this topic.

Parent topic: Shipment Cost Allocation in Optimization
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Document Information

Modified date:
08 December 2018

UID

ibm10753947

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