A load of parts valued at $$77,000$ needs to be shipped from Toronto to Vancouver. They could be shipped by truck, taking $21$ days at a cost of $$1,500,$ or by rail, taking $10$ days at a cost of $$2,500.$ The annual holding cost rate for this type of item has been estimated at $14\%.$

a$.$ Would you recommend shipping by truck or by rail?

b$.$ What is the holding cost for this scenario?

c$.$ How would your recommendation differ if holding costs were $43\%$ instead of $14\%?$ Explain.

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Answer Place your final answer in the box.

a$.$ Most economical option and why? Most economical option is truck. Because its total cost is $2120\mathrm{.}21$ however by rail total cost is $2795\mathrm{.}34.$ Therefore, truck is cheaper than rail.

b$.$ Hold Cost?

c$.$ Recommendation with higher Holding Cost. Explain.