A building contractor can source door frames from either a nearby shop or a far-off forest area. The cost details are summarized in the table below. The total requirement of wood for the construction work is 75 tons. Find the best alternative for buying the wooden frames. Also find the economic advantage of the best alternative. Items Distance to site 900 km Nearby Shop Far-off Forest Area Negligible Negligible $ 2,000 $100 Transportation cost per ton per km Material cost per ton $ 1,250

A building contractor can source door frames from either a nearby shop or a far-off forest area. The cost details are summarized in the table below. The total requirement of wood for the construction work is 75 tons. Find the best alternative for buying the wooden frames. Also find the economic advantage of the best alternative. Items Distance to site 900 km Nearby Shop Far-off Forest Area Negligible Negligible $ 2,000 $100 Transportation cost per ton per km Material cost per ton $ 1,250

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A building contractor can source door frames from either a nearby shop or a far-off forest area.
The cost details are summarized in the table below. The total requirement of wood for the
construction work is 75 tons. Find the best alternative for buying the wooden frames. Also find
the economic advantage of the best alternative.
Items
Nearby Shop Far-off Forest Area
Negligible
Distance to site
900 km
$100
Transportation cost per ton per km
Material cost per ton
Negligible
$ 2,000
$ 1,250

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