14.7. A company in Calgary serves a market in the northwestern United States. Now it ships LTL at an average cost of $30 per unit. If the company establishes a distribution center in the market, it estimates the TL cost will be $15 per unit, inventory carrying costs will be $5 per unit, and the local LTL cost will average $7 per unit. If the company forecasts annual demand at 200,000 units, how much will they save annually?
14.7. A company in Calgary serves a market in the northwestern United States. Now it ships LTL at an average cost of $30 per unit. If the company establishes a distribution center in the market, it estimates the TL cost will be $15 per unit, inventory carrying costs will be $5 per unit, and the local LTL cost will average $7 per unit. If the company forecasts annual demand at 200,000 units, how much will they save annually?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Please solve and explain how you got the answer.
Transcribed Image Text:14.7. A company in Calgary serves a market in the northwestern
United States. Now it ships LTL at an average cost of $30 per unit.
If the company establishes a distribution center in the market, it
estimates the TL cost will be $15 per unit, inventory carrying costs
will be $5 per unit, and the local LTL cost will average $7
per unit.
If the company forecasts annual demand at 200,000 units, how
much will they save annually?
ANSWER.
Annual saving = $600,000
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