A company in Calgary serves a market in the northwestern United States. Now itships LTL at an average cost of $30 per unit. If the company establishes a distributioncenter in the market, it estimates the TL cost will be $15 per unit, inventory carryingcosts will be $7 per unit, and the local LTL cost will average $6 per unit. If the company forecasts annual demand at 200,000 units, how much will they save annually?

Understanding Business
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Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
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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 $7 per unit, and the local LTL cost will average $6 per unit. If the company forecasts annual demand at 200,000 units, how much will they save annually?

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