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slega [8]
3 years ago
10

A manager must make a decision on shipping. There are two shippers, A and B. Both offer a two-day rate: A for $510 and B for $52

7. In addition, A offers a three-day rate of $478 and a nine-day rate of $409, and B offers a four-day rate of $459 and a seven-day rate of $420. Annual holding costs are 35 percent of the unit price. Three hundred and eighty boxes are to be shipped, and each box has a price of $148. Which shipping alternative would you recommend?
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
Business
1 answer:
Sveta_85 [38]3 years ago
5 0

Answer:

The supplier should ship 2 days using B as it yields the lowest cost.

Explanation:

Base on the scenario been described in the question, we can use the following method to solve the question

Units 410

Unit price $ 156.00

total cost of product to be shipped = (Unit price * Units) = 410*156 $ 63,960.00

Holding cost = 39% ,39%*63960 $ 24,944.400

Holding cost for 1 day = 24944.40/365 $ 68.341

Shipper A

Alternative Shippping cost Holding days Holding days * Holding cost for 1 day Total cost = Shipping + holding cost

2-Day $ 538.00 2 $ 136.682 $ 674.68

3 day $ 472.00 3 $ 205.022 $ 677.02

9 day $ 406.00 9 $ 615.067 $ 1,021.07

Shipper b

Alternative Shippping cost Holding days Holding days * Holding cost for 1 day Total cost = Shipping + holding cost

2-Day $ 529.00 2 $ 136.682 $ 665.68

4 day $ 455.00 4 $ 273.363 $ 728.36

7 Day $ 428.00 7 $ 478.386 $

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A gift shop sells 2000 boxes of scented candles a year. The ordering cost is $100 for scented candles, and holding cost is $10 p
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Answer:

Minimun cost: $2000

Explanation:

We solve for the optimal order size using the

Economic Order Quantity:

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<u>Where: </u>

D = annual demand = 2,000 boxes

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H= Holding Cost = $10.00

Q_{opt} = \sqrt{\frac{2(2,000)(100)}{10}}

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EOQ 200

It should order: 2,000 demand / 200 order size =  10 times

At a cost of 1,000 dollar (100 units x $ 10)

It will face an average inventory of 100 units thus holding cost:

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Answer:

C.

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The term used to define standards of behavior that governs individual's and companies conduct is ethics.

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