A company with a plant in Basel can be served by bothrail and truck at a cost of €250 and €1500 per load, respectively. Thetransit time for the train is 15 days while for the truck is 5 days. (a) Ifthe daily cost of transit inventory is €100, which transportation modeis more economical attractive? (b) What will be the costs involved, ifthe daily inventory carrying cost is €50? (c) Identify related principlesneed to consider when designing a transportation system.
A company with a plant in Basel can be served by bothrail and truck at a cost of €250 and €1500 per load, respectively. Thetransit time for the train is 15 days while for the truck is 5 days. (a) Ifthe daily cost of transit inventory is €100, which transportation modeis more economical attractive? (b) What will be the costs involved, ifthe daily inventory carrying cost is €50? (c) Identify related principlesneed to consider when designing a transportation system.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
A company with a plant in Basel can be served by both
rail and truck at a cost of €250 and €1500 per load, respectively. The
transit time for the train is 15 days while for the truck is 5 days. (a) If
the daily cost of transit inventory is €100, which transportation mode
is more economical attractive? (b) What will be the costs involved, if
the daily inventory carrying cost is €50? (c) Identify related principles
need to consider when designing a transportation system.
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