Transportation Operations LINCS Practice Exam

How is "Cost Per Unit Shipped" calculated?

1. Total shipping costs divided by total units shipped

2. Total number of shipments divided by total costs

3. Average shipping time divided by units shipped

4. Total revenue from shipments divided by units shipped

The correct answer is: Total shipping costs divided by total units shipped

The calculation of "Cost Per Unit Shipped" involves determining how much it costs to ship each individual unit of goods. This is done by taking the total shipping costs incurred and dividing that figure by the total number of units that have been shipped. By using this approach, one can accurately assess the shipping cost implications per unit, which allows for better budgeting and pricing strategies within operations. It provides a clear picture of how effectively resources are being used in the shipping process, which is essential for companies looking to optimize their logistics and minimize costs. The other options do not reflect the appropriate calculation needed for determining the cost per unit shipped. For example, dividing the total number of shipments by total costs doesn’t provide a per-unit cost and instead gives a ratio of how many shipments were made relative to costs. Similarly, average shipping time divided by units shipped does not relate to cost and focuses on time efficiency rather than financial metrics. Lastly, total revenue from shipments divided by units shipped provides a measure of revenue per unit sold but does not account for the costs associated with shipping those units, which is crucial for operational financial analysis.