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Unformatted text preview: airfreight takes 1 day and costs $8,000. Holding cost is estimated to be 40% in either case. How should shipments be made? 1 ANSWERS Problem 1 : From Table 11.3, we see that this company would have to increase sales by approximately $5.56 Problem 2 : From Table 11.3, we see that this company would have to increase sales by approximately $2.94 Problem 3 : Cost via container ship: [24 * (.40* 75,000) 365 ]+ 5,000 = (24*82.19) + 5,000 = 1,972.56 + 5,000 = $6,972.56 Cost via airfreight: [1* (.40* 75,000) 365 ]+ 8,000 = (1*82.19) + 8,000 = 82.19 + 8,000 = $8,082.19 Therefore, use the container ship as it has a lower total cost. 2...
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This note was uploaded on 08/29/2009 for the course BSOP BUSN taught by Professor Unknown during the Spring '09 term at DeVry Addison.
 Spring '09
 Unknown

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