A manager must make a decision on shipping. There are two shippers. A and B Both

Question

A manager must make a decision on shipping. There are two shippers. A and B Both offer a two-day rate A tor $500 and B for $525 In addition. A offers a three-day rate of $460 and a nine-day rate of $400, and B offers a four-day rate of $450 and a seven-day rate of $410. Annual holding costs are 35 percent of unit price Three hundred boxes are to be shipped, and each box has a price of $140 Which shipping alternative would you recommend? (Round your intermediate calculations to 3 decimal places and final answers to 2 decimal places. Omit the *'$" sign in your response.)

Explanation / Answer

A B 2 day rate $500 $525 3 day rate $460 - 4 day rate - $450 7 day rate - $410 9 day rate $400 - Total Boxes $300 Cost of per Box $140 Annual Holding Cost 35% of Unit Price Total Annual Holding cost 42000 Holding cost per day 40.2739726 Ship two day using A Since Holding cost is $40, so 3rd, 4th , 7th and 9th day total cost is more compared to 2 day cost incurred using ship A

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