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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
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 four groups as shown below. Your opportunity rate is 11 percent.
AVERAGE MONTLY REMITTANCES DAYS OF FLOAT
CUSTOME GROUP | NUMBER | FACE VALUE | BANK A | BANK B | BANK C |
1 | 2,000 | $50,000 | 5 | 3 | 1 |
2 | 4,000 | 30,000 | 1 | 6 | 4 |
3 | 1,000 | 18,000 | 3 | 7 | 5 |
4 | 200 | 20,000 | 7 | 1 | 3 |
Varable processing costs | $.30 | $.60 | $.80 | ||
Fixed costs | $300 | $400 | $150 |
Using the complete enumaration model,determine the optical number of lockbox sites and the customer allocation among the chosen sites.
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