A manager must make a decision on shipping. There are two shippers, A and B. Both offer a two-day rate: A for $504 and B for $526. In addition, A offers a three-day rate of $472 and a nine-day rate of $410, and B offers a four-day rate of $452 and a seven-day rate of $428. Annual holding costs are 30 percent of unit price. Three hundred and sixty boxes are to be shipped, and each box has a price of $150. Which shipping alternative would you recommend? (Round your intermediate calculations to 3 decimal places and final answers to 2 decimal places. Omit the "$" sign in your response.)
A B
Option Cost Option Cost
2 days $ 2 days $
3 days $ 4 days $
9 days $ 7 days $
a. Ship two-day using A
b. Ship three-day using A
c. Ship two-day using B
d. Ship four-day using B
e. Ship seven-day using B
Answers: 3
![Cost = 504 + \Big [ 0.30 \times (360 ) \times (150) \times (\dfrac{2}{365}) \Big ]](/tpl/images/1007/6788/cc6cf.png)
![Cost = 526 + \Big [ 0.30 \times (360 ) \times (150) \times (\dfrac{2}{365}) \Big ]](/tpl/images/1007/6788/40c91.png)
![Cost = 472 + \Big [ 0.30 \times (360 ) \times (150) \times (\dfrac{3}{365}) \Big ]](/tpl/images/1007/6788/6563d.png)
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