Problem 15-3 A manager must make a decision on shipping. There are two shippers,
ID: 455513 • Letter: P
Question
Problem 15-3
A manager must make a decision on shipping. There are two shippers, A and B. Both offer a two-day rate: A for $502 and B for $520. In addition, A offers a three-day rate of $470 and a nine-day rate of $401, and B offers a four-day rate of $455 and a seven-day rate of $436. Annual holding costs are 39 percent of unit price. Four hundred and ten boxes are to be shipped, and each box has a price of $144. Which shipping alternative would you recommend? (Round your intermediate calculations to 3 decimal places and final answers to 2 decimal places. Omit the "$" sign in your response.)
A
B
A manager must make a decision on shipping. There are two shippers, A and B. Both offer a two-day rate: A for $502 and B for $520. In addition, A offers a three-day rate of $470 and a nine-day rate of $401, and B offers a four-day rate of $455 and a seven-day rate of $436. Annual holding costs are 39 percent of unit price. Four hundred and ten boxes are to be shipped, and each box has a price of $144. Which shipping alternative would you recommend? (Round your intermediate calculations to 3 decimal places and final answers to 2 decimal places. Omit the "$" sign in your response.)
Explanation / Answer
Ship two-day using A
A B Option Cost Option Cost 2 days 628 2 days 646 3 days 659 4 days 707 9 days 969 7 days 878