O ship two-day using B O ship three-day using A O ship four-day using B O ship seven-day using B O ship two-day using A
O ship two-day using B O ship three-day using A O ship four-day using B O ship seven-day using B O ship two-day using A
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Transcribed Image Text:**Shipping Decision Problem:**
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 $527. 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 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?
*(Round your intermediate calculations to 3 decimal places and final answers to 2 decimal places.)*
**Table of Shipping Options:**
- **Shipper A:**
- 2 days: (Cost not specified)
- 3 days: (Cost not specified)
- 9 days: (Cost not specified)
- **Shipper B:**
- 2 days: (Cost not specified)
- 4 days: (Cost not specified)
- 7 days: (Cost not specified)
**Graph Explanation:**
The chart provided is a table with two columns representing two shippers, A and B, and their respective shipping options and costs for different shipping durations. However, the specific costs are not visible in the table image.
**Options for Recommendation:**
- Ship two-day using B
- Ship three-day using A
- Ship four-day using B
- Ship seven-day using B
- Ship two-day using A
The manager should use the provided costs and the annual holding cost percentage to calculate the most cost-effective shipping option.
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