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Based on the production line expansion plans of the company, the sales department is finalizing long-term sales contracts which will increase sales to Vancouver, Edmonton,

Based on the production line expansion plans of the company, the sales department is finalizing long-term sales contracts which will increase sales to Vancouver, Edmonton, Winnipeg and Montreal. The projected changes to the sales volumes are summarized in the following table:

Vancouver Edmonton Winnipeg Montreal
Current Sales ($Mn) 2.585 1.68 1.68 1.071
Future Sales ($Mn) 4.134 2.352 2.52 1.927

Leafs VP-Finance projected that the new sales prices offered to secure the above deals would reduce your allocated annual operation budget by $10,122. This means you will have a tighter budget to manage the transportation of products to these markets.

  1. Without considering the changes in production and sales, which one(s) of the transportation companies will you sign a contract with for these four markets?

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