1)

From
Chicago   Cost From Baltimore Cost
$
Vessel charter 72,000.00 Load and Block 120$/truck $3000
$
Load and block 40$/truck 2,000.00 Rail rate at 1792$/truck $44800
$
Rail rate at 180$/truck 9,000.00 Handling Baltimore $/truck $10000
$
Wharfage 1,070.00 Ocean Freight 1440$/truck $72000
Loading and stowing
80$/truck $4000 Insurance 150$/truck $7500
$ $13730
Seaway tolls 54$/truck 2,700.00 Total 0
$
Unloading 4,200.00
$
Insurance 210$/truck 10,500.00
$
Total 105,470.00

2) I would recommend Baltimore, because it is the cost option the save costs and
also provides the faster transportation service. If we use charter vessel it would
deliver/arrive on 30th of May and company will receive payment. If case of
Baltimore the trucks will be sent two at (25#, 26#) the time and therefore will
finish on 16th of April and reach Doha at 8th of may and get paid. So, they will
arrive 22 days earlier. Moreover, HDT has to pay 8% yearly interest rate and to
calculate the savings for 25# and accordingly 26# truck we must do the following:
(172000*0.08*22)/365 = 829.37
Multiplying 829.37*50 trucks 41468.50. Adding this to the costs of using Chicago
vessel charter – 109470, we get the total costs of 146938.50. So, Baltimore is
cheaper.
3)Price must contain company’s (HDT) daily cost, which should cover the finished
inventory and cost in investment. Transportation cost which we calculated above
can also be subtracted and terms and conditions of the sale should be stated and
it should also specify the date of cargo arrival, pickup and payment. Furthermore,
HDT should exclude total cost of ocean freight being 72000 and also the costs of
loading and tolls. Previous Insurance rate must be excluded and recalculated,
since we change sea freight. The cost of insurance would be 7500(150*50) and
total cost would be 92500(17200-79500). Now we get the total cost
approximately 95000 per truck, considering raw resources and labor work
coverage.
4). The HDT will not be responsible for unloading and instead, the buyer would be
given a responsibility to unload the railcars. All shipping costs will be excluded
from total cost expect rail rates. Labor, rail rate (44800) and raw materials must
be included in new terms and conditions of sale.

5) We must come up with the equation that will be give us less total cost for
Chicago compared to Baltimore. We will mark interest rate as X.
Chicago - 105470 + (172000x50x22)/365X X=0.053
We should get less than Baltimore which is 137300
X= interest rate
X= 0.053
105470 + 27473 = 132943 this is less than 137300 so HDT can change routing
using this interest rate.

6)0.12(172000 one truck)/365 =56.55

So, I recommend HDT to pay overtime if the total cost is less than 56.55.
Moreover, the selling price of the truck stays 172000 and everyday the company
should expect for payment cost of 56.55 for each day.