A manager must make a decision on shipping. There are two shippers, A and B. Both offer a two-day rate: A for $522 and B for $53
2. In addition, A offers a three-day rate of $478 and a nine-day rate of $410, and B offers a four-day rate of $456 and a seven-day rate of $424. Annual holding costs are 30 percent of unit price. Three hundred and thirty boxes are to be shipped, and each box has a price of $154. Which shipping alternative would you recommend?
1 answer:
Answer:
Alternative of shipping boxes through shipper A by three-day rate offer is most economical option. Cost of shipping is $603.31, which lowest of all costs.
Explanation:
Given Q = 330 boxes
Unit price, p = $154
Holding cost = H = 30% of p = 0.3*154 = $46.2 per box per annum
Total holding cost = HC = Q*H*(d/365)
Total Shipping Cost = R + HC
Calculation of shipping cost of various alternatives are attached in the following images.
Alternative of shipping boxes through shipper A by three-day rate offer is most economical option. Cost of shipping is $603.31, which lowest of all costs.
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Answer: Option (d) is correct.
Explanation:
Amount paid for candy = $1,500
Items received = 8,500 pieces of candy
Group 1 = 2,500 pieces
Selling price = $0.15 each
sale value = pieces sold × Selling price
= 2,500 × $0.15 each
= $375
Group 2 = 5,500 pieces
Selling price = $0.36 each
sale value = pieces sold × Selling price
= 5,500 × $0.36 each
= $1,980
Group 3 = 500 pieces
Selling price = $0.72 each
sale value = pieces sold × Selling price
= 500 × $0.72 each
= $360
Total sale value = $375 + $1,980 + $360
= $2,715
= 72.92%
Proportion of cost for Group 2 = cost × Percentage of sale in Group 2
= $1,500 × 72.92%
= $1,093.8
= $0.1988
= $0.20(approx)