Your firm sells to wholesalers nationwide. Your bank has just completed a lockbox study of your cash collection system. After a thorough study of your remittance information, they categorized your customers into three groups as shown below. Your annual opportunity cost of funds is 5%.

Customer Group	# of Remittances	Average Face Value	Bank A Float	Bank B Float	Bank C Float
1	2,000	$100,000	4	2	2
2	1,000	$250,000	2	5	6
3	3,000	$28,000	4	6	3
Variable Cost			$0.50	$0.20	$0.70
Fixed Cost			$400	$300	$150

Which of the following one-bank lockbox systems has the lowest total cost?

	a.	Bank B
	b.	Bank A
	c.	Bank C

Which of the following two-bank lockbox systems has the lowest total cost?

	a.	Bank A-Bank C
	b.	Bank B-Bank C
	c.	Bank A-Bank B

Use the complete enumeration model to determine the optimal number of lockbox sites and the customer allocation among the chosen sites.

What is the total cost for the three-bank lockbox system?

	a.	$154,610.96
	b.	$172,415.07
	c.	$143,754.11
	d.	$161,658.22

se the complete enumeration model to determine the optimal number of lockbox sites and the customer allocation among the chosen sites.

What is the optimal combination of lockbox system?

	a.	Bank A-Bank B-Bank C
	b.	Bank B-Bank C
	c.	Bank B
	d.	Bank A-Bank C

Use the complete enumeration model to determine the optimal number of lockbox sites and the customer allocation among the chosen sites.

What is the customer allocation for the optimal lockbox system?

	a.	Customer Groups 1 and 3 are assigned to Bank C and Customer Group 2 is assigned to Bank B.
	b.	Customer Group 1 is assigned to Bank A, Customer Group 2 is assigned to Bank C, and Customer Group 3 is assigned to Bank B.
	c.	Customer Group 1 is assigned to Bank B, Customer Group 2 is assigned to Bank A, and Customer Group 3 is assigned to Bank C.
	d.	Customer Groups 1 and 3 are assigned to Bank A and Customer Group 2 is assigned to Bank C.