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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
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. Answer Place your final answer in the box. a. Most economical option and why? b. Hold Cost? c. Recommendation with higher Holding Cost. Explain. Show your work here (mandatory):
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