Table 9. Points for Consideration in Establishing Delivery Charges 



Quantity 

 (No. of 100-lb. units) 



Charge 

 Per 100-Ib. Uniti 



Reason 



1- 2 



3- 9 

 10-19 

 20-49 



50 and over 



$.25 flat charge 

 .10 

 .09 

 .08 



.07 



Minimum delivery charge on 

 small orders 



Above minimum; unit cost de- 

 clines rapidly 



Half ton or over; unit cost 

 still declining rapidly 



One ton or over, but under 

 half truckload; unit cost 

 savings decreasing 



Half truckload and over; sav- 

 ings per unit small beyond 

 50 units 



1 These unit charges might be smoothed to equate total charges at the quantitative breaking points. 



expect any difference in the two methods concerning the credit-vs.-cash 

 area. With respect to the subject of inconvenience, there is the chance with 

 bulk that arrangements and facilities, being new, can be initially worked 

 out to be convenient to both dealer and producer. While the same would be 

 true of new plants which would receive bagged feed, it is not generally as 

 true of older plants. 



Relative to quantity discounts and charges for delivery, data collected 

 in the study were not extensive enough to permit for bulk feed analyses 

 parallel to those made for bagged feed. Somewhat indicative of the ideas 

 of companies selling bulk feed regarding relative costs were the figures in 

 use. These paralleled the discounts and charges in effect on bagged feed, 

 except, of course, that the minimums were higher since bulk service wss 

 not made available to smaller customers. From the cost projections subse- 

 quently made, the potentional differences in per ton delivery costs are 

 probably not sufficient to justify differential treatment on that item. In the 

 absence of detailed information, the same quantity discounts could well 

 be applied to bulk and bagged feed, within operational limits. 



At the time this study was made, two additional discounts were listed 

 for bulk feed by companies offering this service, i.e., "bag savings" and 

 "bulk discount". The former is not a net saving in the aggregate. Against 

 the unit value of new bags there is a partial offset in the form of "bag re- 

 turn credit". The extent to which the latter is offsetting depends upon the 

 price allowed for No. 1 bags returned and upon the percentages of No. 1 

 and undergrade bags (these at a substantial discount per unit). 



"Bulk discount" represented a sharing with the producer of the aggre- 

 gate potential savings to the company on bulk feed and/or an incentive to 

 convert customers to bulk. Because of the difficulty of maintaining both 

 efficient bulk and bagged routes in many territories preliminary cost 

 appraisals indicate the likelihood of little or no potential average savings 

 on delivery cost exclusive of loading. There may be some long-run savings 

 at the mill and in loading. Hence, it is possible that real savings to feed 

 companies on bulk feed are less than the discounts offered by feed com- 

 panies when this study was made. 



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