# CH11hw - Since the daily holding cost(\$82.20 is more than...

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11 11.8 (a) Daily holding cost = (annual holding cost × cost)/days in year = (.3 × \$100,000)/365 = \$82.19. Difference in cost per day between shipping options = (\$4,800 – \$3,800)/10 days = \$100. Since the daily holding cost (\$82.20) is less than the daily cost of faster shipping with option b (\$100), use the slower shipping, option a. (b) Implications of added in-transit time to the customer: delivery of this product or of a major product of which this is a component may have repercussion well beyond the cost savings and a very unhappy customer. 11.9 Daily holding cost = (annual holding cost × cost)/days in year = (.3 × \$100,000)/365 = \$82.20. Difference in cost per day between shipping options = (\$4,000 – \$3,800)/10 days = \$20.
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Unformatted text preview: Since the daily holding cost (\$82.20) is more than the daily cost of faster shipping (\$20), use the faster shipping, option a. 11.10 (a) Daily holding cost = (annual holding cost × cost)/days in year = (.35 × \$250,000)/365 = \$239.73. Difference in cost per day between shipping options = \$175. Since the daily holding cost (\$239.73) is more than the cost of faster shipping (\$175), use the faster sub-contractor. (b) Implications of added in-transit time to the production process: potential delay in activity for which the component is destined (new product development, quality test, the production process, etc.). 1...
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