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Superpart is an industrial distributor that sources from hundreds of suppliers. The two modes of transportation available for inbound shipping are LTL (less than truckload)

Superpart is an industrial distributor that sources from hundreds of suppliers. The two modes of transportation available for inbound shipping are LTL (less than truckload) and TL (truckload). LTL shipping costs $1 per unit, whereas TL shipping costs $400 per truck. Each truck can carry up to 1,000 units. Superpart wants a rule assigning products to shipping mode (TL or LTL) based on annual demand. Each unit costs $50, and Superpart uses a holding cost of 20 percent. Superpart incurs a fixed cost of $120 for each order placed with a supplier. Determine a threshold for annual demand above which TL is preferred and below which LTL is preferred.

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