Your options for shipping $100,000 of machine parts from Baltimore to Kuala Lumpur, Malaysia, are (1) use a ship that will take 30 days at a cost of $3,800, or (2) truck the parts to Los Angeles and then ship at a total cost of $4,800. The second option will take only 20 days. You are paid via a letter of credit the day the parts arrive. Your holding cost is estimated at 30% of the value per year. If you have a third option and it costs only $4,000 and also takes 20 days, what is your most economical plan? Assume 365 days per year.
Your options for shipping $100,000 of machine parts from Baltimore to Kuala Lumpur, Malaysia, are (1) use a ship that will take 30 days at a cost of $3,800, or (2) truck the parts to Los Angeles and then ship at a total cost of $4,800. The second option will take only 20 days. You are paid via a letter of credit the day the parts arrive. Your holding cost is estimated at 30% of the value per year. If you have a third option and it costs only $4,000 and also takes 20 days, what is your most economical plan? Assume 365 days per year.
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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How do you get the daily withholding from alternative 1 and alternative 2?
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Your options for shipping $100,000 of machine parts from Baltimore to Kuala Lumpur, Malaysia, are (1) use a ship that will take 30 days at
a cost of $3,800, or (2) truck the parts to Los Angeles and then ship at a total cost of $4,800. The second option will take only 20 days. You
are paid via a letter of credit the day the parts arrive. Your holding cost is estimated at 30% of the value per year.
If you have a third option and it costs only $4,000 and also takes 20 days, what is your most economical plan? Assume 365 days per year.
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