Ch $15$ looks at freight alternatives, factoring in delayed revenue by shipping a slower method. H$=$ Annual earning potential of an item. If we analyze two day shipping vs five day shipping, obviously $5$ day is cheaper but what is the cost by not being able to bill our customer for those add'l three days $(5-2).$ Is it more$/$less than the freight savings.

Attached is a document with two problems:

#$1.$ No freight is given. Assume freight for $2$ Day is $"$X$"$ and freight for $5$ day is $"$X$-$$$135".$ You need to determine what is the incremental holding cost of waiting $3$ extra days to bill the customer. Compare the cost to the $ $135$ savings. If the cost is more than the savings, ship faster method. If the cost is less than the savings, ship the slower method.

# $2.$ Evaluate $1$ day $($overnight$),3$ day, and $6$ day shipping alternatives and determine which is the best factoring in incremental holding costs. H $=80$ x $(30\%$ x $200)=$ $ $4800.$ You have two approaches: Assume the fastest method $(1$ day$)$ is your baseline and compare extra days to $"1".$ OR assume baseline is $"0"$ and compare each shipping alternative to $"0".$

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