Pam works for a corporation that recently fired three top managers who were caught using the company credit cards to lavishly fu
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The complete question is as follows:
Dan owns an autographed copy of a Brittany Spears CD that he values at $100. If he sells the CD at the garage sale he’s planning to hold in a few weeks, it will be sold to a buyer with a reservation price of $175. If he sells it on eBay, it will be sold to a buyer with a reservation price of $500. eBay will charge Dan $50 to auction the CD, which just covers eBay’s opportunity cost of running the auction. Relative to selling the CD at his garage sale, auctioning the CD on eBay will lead:
A. to no change in total economic surplus.
B. total economic surplus to increase by $500.
C. total economic surplus to increase by $275.
D. total economic surplus to increase by $100.
Answer: C - Total economic surplus to increase by $275.
In this question, we only need to consider producers' surplus since we're considering the various options for Dan to sell his CD.
We calculate Producer's Surplus as follows:
Economic costs not only refers to explicit costs like cost of the CD, but also includes opportunity costs. Since we need to calculate producer's surplus when Dan sells on Ebay, we need to consider the following costs:
Value of the CD = $100
Ebay's opportunity cost that Dan will have to bear = $50
Among the three expenses listed above, the profit Dan would've got in the garage sale is considered the <u>implicit cost or opportunity cost.</u>
Substituting the values we have in the equation above, we get,
Answer and Explanation:
Stockouts logistics cost factor-
Safeway,
Kmart
Transportation logistics cost factor-
Hyundai,
Ford
Inventory logistics cost factor-
Toyota,
Frito Lay
Return goods handling logistics cost factor-
Phillips,
Costco
Warehousing and materials handling logistics cost factor -
Coca Cola,
Walgreens
Order processing logistics cost factor-
SC Johnson,
Chrysler
logistics cost factors are cost factors associated with logistics ( concerned with acquisition, storage and transportation ofresources) based on the kind of business or kind of products or services a company is into. From the above we see that logistics cost factors vary as the companies are into different products or services and industries and therefore face different logistics costs associated with their production and or delivery. Every company aims to achieve logistics efficiency through minimizing costs associated with their logistics costs factors example Hyundai with transportation logistics cost factors would aim to reduce it's logistics cost factors and maximise profits by its locating it's manufacturing plant close to where it imports parts for it's vehicle manufacturing so as to reduce cost of transporting vehicle parts to manufacturing plant
