Consider a manufacturer that produces asphalt shingles 340 days per year. The production process uses 100 tons of crushed limestone per day, on average, with a standard deviation of 25 tons. Recent estimates suggest that holding costs are approximately 50% of the limestones value due to contamination risk. The manufacturer is currently considering two rail freight options. Assume that the landed cost per ton of limestone is the sum of material and transportation costs, the relevant information for the two rail options follows (assume no variability in lead time due to lack of information).

\begin{tabular}{|l|l|l|l|} \hline & Fixed Cost & Lead Time (Days) & Landed Cost \\ \hline Rail Co. 1 & $300 & 4 & $21.00 \\ \hline Rail Co. 2 & $275 & 8 & $21.50 \\ \hline \end{tabular}